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Fed’s Head Jerome Powell’s Rhetoric will Affect the GBPUSD

3/7/2023 12:02 PM

The GBP/USD pair continues its unstable dynamics, trading at 1.2044 amid increased negative expectations regarding the "hawkish" rhetoric of the Bank of England.

Yesterday, the Financial Times published an article in which it pointed to a sharp increase in investors' expectations regarding further growth in the interest rate, which on February 2 was increased by 50.0 basis points to 4.0%. Despite the recent statement by the head of the regulator, Andrew Bailey, that there is no urgent need for monetary tightening, futures signal that analyst sentiment is again shifting in favor officials raising the figure by 50.0 points, ignoring the imminent recession in the economy.

The quotes of the US dollar fell slightly in anticipation of the speech of the head of the US Federal Reserve, Jerome Powell, which will be held today and tomorrow in the Senate Banking Committee. As expected, the official plans to discuss the further monetary policy of the department in detail, which is now of major interest among investors. The local dynamics of the asset are affected by yesterday's data on the volume of industrial orders: in January, the indicator lost 1.6% after rising by 1.7% a month earlier.

On the daily chart, the trading instrument is moving within the local sideways corridor of 1.2420–1.1940, getting ready to exit the range downwards.

Technical indicators keep a sell signal: the EMA fluctuation range on the Alligator indicator expands downwards, and the AO histogram forms downward bars below the transition level.

Resistance levels: 1.2170, 1.2420. | Support levels: 1.1940, 1.1630.

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