Gbp and usd rise as markets brace for speeches by Powell and Bailey

GBPUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.55%	74.6 Pips
Week to-date	0.69%	92.6 Pips
June	0.64%	86.7 Pips

Upcoming key events (London Time)

Tue 03:00 PM USD Federal Reserve Chair Jerome Powell testifies
Tue 03:00 PM GBP Bank of England Governor Andrew Bailey speech

What happened lately

On Tuesday, the market will be eagerly awaiting significant events concerning both the US and the UK, which may substantially influence sentiments and trading decisions. In the United States, Federal Reserve Chair Jerome Powell is scheduled to testify, an event that typically garners considerable attention as his comments often provide insights into future monetary policy directions. Powell’s testimony can offer cues about the Federal Reserve’s stance on interest rates and economic outlook, thus affecting the US dollar’s value in global forex markets.

Simultaneously, in the UK, the focus will be on the Bank of England’s Governor, Andrew Bailey, who is set to deliver a speech. Governor Bailey’s remarks might provide information regarding the UK’s economic conditions and potentially the Bank of England’s policy decisions on interest rates and other financial measures. His insights are especially critical given the UK’s current economic challenges, such as inflationary pressures and post-Brexit adjustments.

The GBPUSD’s recent rise by 0.55% to 1.35200 on Monday indicates a mildly bullish sentiment towards the British Pound, possibly driven by market expectations ahead of the high-profile events. As both Jerome Powell and Andrew Bailey are scheduled to speak simultaneously, the outcomes could introduce volatility in the GBPUSD currency pair. Should Powell adopt a hawkish tone suggesting tighter US monetary policy, the USD might strengthen against the GBP. Conversely, if Bailey provides a positive outlook for the UK economy or implies future monetary tightening, the GBP could gain further against the USD. Ultimately, the interplay of both officials’ communication may lead to a dynamic trading session with potential swings in GBPUSD, depending on which narrative appears more dominant or favorable to investors.

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What can we expect from GBPUSD today?

GBPUSD on Monday rose 0.55% to 1.35200. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for GBPUSD looks bullish as the pair ended higher after Monday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.35773 with break above could target R2 at 1.36346 or figure level area. While towards the downside, we are looking at daily low of 1.33699 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.35309 may suggest continuation after recent positive movement.

For the week to-date, take note that GBPUSD is mixed as compared to the prior week.

Key levels to watch out:

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