Powell Testimony In Focus
Welcome to a new trading week after the challenging last one which has cost us some feathers. Many trades have failed to deliver the desired results. However, this week is not such an event-loaden one, which is why we might see more muted trading conditions.
As recessionary fears ebb and flow so too will the U.S. dollar, given its safe-haven status. The greenback’s major focus this week will be the testimony from Federal Reserve Chair Jerome Powell on Wednesday and Thursday. If Powell firms up already strong expectations for further monetary policy tightening, sacrificing economic growth, the dollar could rise.
Traders will eye U.K. inflation figures due on Wednesday. Inflation is expected to show another increase, intensifying hawkish pressure on the Bank of England to increase interest rates by 50bp in August.
The outlook for the pound sterling remains bearish despite its short-term relief rally. A higher resistance is expected to come in at around 1.25 (green ellipse). The sentiment will only change from bearish to bullish in case of a clear break above 1.27. Current supports are seen at 1.2150 and 1.20.
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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