GBP/USD Vulnerable To Further Losses

Federal Reserve Chairman Jerome Powell reassured investors that the Fed is committed to a dovish policy that fosters a sustainable recovery from the pandemic. As for inflation concerns, Powell said the central bank has tools to curb any inflation pressures and would react if inflation expectations started “moving persistently and materially” above tolerable levels. The anti-risk U.S. dollar traded lower on the back of Powell’s reiteration of the Fed’s ultra-accommodative stance.

EUR/USD: The euro moved slightly higher on the back of a weakening U.S. dollar but bulls failed to push the pair above 1.1930. We still favor the short-term upward movement with an extension of gains towards 1.1950 but if the euro drops below 1.1860, chances change in favor of the bears with lower targets seen at 1.18 and 1.1780.

GBP/USD: The technical picture hasn’t changed materially but chances remain slightly in favor of the bears. Below 1.3715 bears could attempt to test the 1.3695-level but the main focus is on the March low at 1.3670 and a break of that support would open the door to further losses. Bulls, however, may wait for a breakout above 1.3760 in order to anticipate a test of 1.38.

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