The price of GBPUSD jumped higher after the FOMC rate statement, could this momentum continue?
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The Federal Reserve hikes interest rates by 75bps to 2.5% today. In the press conference that followed, the Fed Chairman Powell said that rates will slow after today. This means that future hikes will be less than 75bps and more like 25-50bps depending on the data. The Fed’s focus is more on price stability than the labor market, with the Fed expecting a softer jobs number. This saw the USD weaken across the board lifting many major forex pairs prices including the GBPUSD.
The GBP on the strength meter is interesting as it is at the lows in a reversal zone. This combined with the USD weakness could see the GBPUSD trade much higher.
Observing the monthly chart, the price is in a large trading range between 1.2000 to 1.4200. The monthly close could be within the previous months range, at the support lows. This technical setup suggests the price is more likely to trade higher with the longer term outlook looking to be the range highs.
The 4hr chart has formed a new higher high, this could offer long ideas on a retracement phase. If the price was to retest the lows and find buyers, the market will likely move back to the highs and even beyond considering current market conditions.
Did you see our GOLD analysis? You can see it here.
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