GBPUSD has gained bullish momentum and moved up to the 1.2350 region early on Thursday after falling towards 1.2300. At 1.2360, Further the pair encounters significant resistance; in order to move higher. It must convert this level into support.
Investors will be paying close attention to Fed officials’ comments.
The US stock index futures gain between 0.3% and 0.4% in the European session. And the UK’s FTSE 100 Index is up 0.5% after opening higher on Thursday. Indicating that the market sentiment is still positive. The US Dollar (USD) is likely to remain weak and support. Further gains in the GBPUSD if risk flows continue to dominate the markets in the afternoon.
Meanwhile remarks from Fed officials may alter the atmosphere and strengthen the USD. Citing Republican Representative Kevin Hern was informed by FOMC Chairman Jerome Powell to the Republican Study Committee that they expect one more rate hike this year. This information was published by Bloomberg late on Wednesday. Despite this news, the CME Group Fed Watch Tool predicts a 60% chance that the Fed will maintain its target interest rate in May.
Moreover Later in the day, Fed Governor Christopher Waller, Minneapolis Fed President Neel Kashkari, and Richmond Fed President Thomas Barkin will also give speeches. The Dollar might strengthen along with rising Treasury bond yields and cause GBPUSD to undergo a downward correction if they make hawkish remarks and lead markets towards a 25-basis point rate increase at the upcoming meeting.
The final revision to the fourth-quarter Gross Domestic Product will be included in the US economic agenda (GDP) additionally to the weekly Initial Jobless Claims.
GBPUSD Technical Analysis
At 1.2360, the pivotal resistance level, the middle of the ascending regression channel, lines up. GBPUSD may drop towards 1.2320 (the lower limit of the ascending channel. Or the 20-period Simple Moving Average (SMA)) if that level holds.
Further If the pair closes on the four-hour time frame below that support, more selling may enter. Sending the price down to psychological levels of 1.2300 and 1.2280. (50-period SMA).
Furthermore If buyers can sustain the GBPUSD price above 1.2360, more advances towards 1.2400. (a psychological mark and the upper-limit of the ascending channel) may be seen. If 1.2400 is broken, 1.2450 (the high from December 22) would be the next bullish objective.
