Speech from Fed Chair Powell is a main event of the day. Jerome Powell will deliver opening remarks during Jackson Hole Symposium, today at 3:00 pm BST. There is a feeling in the market that he may sound hawkish today given that other Fed members, who spoke earlier in the week, were rather hawkish. However, as he is a head of world's most important central bank, we should not expect Powell to give any precise hints on where he sees rates at year's end, like Bullard or Harker did yesterday. Having said that, one can expect Powell to be somewhat hawkish but he will try to sound balanced in order not to trigger major market moves.
Taking a look at the GBPUSD chart at H1 interval, we can see that the pair has recently launched an upward correction following an over year-long downward move. However, the 100-hour EMA (red line on the chart below) proved to be too tough a resistance to overcome and the pair started to move lower today. While the outlook for USD is rather bullish, the same cannot be said about GBP. The UK is heading for an energy crisis just like the rest of Europe and the UK energy regulator announced today that price caps on gas and electricity prices will be increased by 80% amid a spike in costs. Such a big price hike may weigh on economic activity and contribute to pressure on GBP. Having said that, fundamentals support continuation of a downward move on the pair and a move back towards recent lows in 1.1700 area cannot be ruled out.
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Source: xStation5
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