GBPUSD is muted today ahead of the critical speech by Jerome Powell in the Jackson Hole Symposium. Investors will look for signals on what measures the Fed will take to increase the inflation and what that will mean for the monetary policy. Analysts expect the Fed to keep its accommodative policy until inflation and employment strengthens. I expect high volatility for the pair during and after Powell speech as we might see a shift in Feds policy.
The strong rally for the GBPUSD pair attributed to the greenback weakness. Disappointment from the economic data in the USA and the rising number of new infections in some states weigh in USD. Yesterday the U.S. consumer confidence dropped to six-year lows surprising economists who expected a recovery. Today, the U.S. MBA Mortgage Applications dropped to -6.5% on August 21 from previous week reading of -3.3%.
From the UK yesterday the retail sales disappointed investors but had no impact on the British pound. The CBI Distributive Trade Survey dropped to -6% in August from +4% in July, well below the estimates of 8%.
GBPUSD Analysis
GBPUSD is 0.05% lower at 1.3144, as traders are cautious ahead of the Jackson Hole speeches. The pair consolidates the last six trading session between 1.31 and 1.3250 waiting for signals from Jerome Powell.
On the daily chart, support stands at 1.3125 the daily low. More buying interest would emerge at 1.3053 the low from yesterday. If sellers break that level then might challenge 1.3010 the low from August 12.
On the other side, minor resistance for GBPUSD is at 1.3165 today’s high. More selling pressure would emerge at 1.3252 the high from August 21. In case of a break higher then the next supply zone stands at 1.3425 the high from December 16.
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GBPUSD Daily Chart
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