An accommodating Fed stance is essential for a more meaningful rally

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GBP / USD struggled to bounce off lows amid calm around Evergrande. Is Powell going to fuel the pound? The Fed chairman is holding a press conference that could prove decisive for the market’s reaction, reports Yohay Elam, analyst at FXStreet.

See – GBP / USD: BoE hawkish political surprise needed to fuel pound – MUFG

The pound is at the mercy of Powell

“Will Britain join the North American Free Trade Agreement?” This idea was launched by the press. While such a move makes no geographic sense, it could boost UK-US trade and give the pound a much needed boost. “

“The Fed is on the verge of leaving its policies unchanged, but is signaling when and perhaps how it intends to cut its bond buying program. Reducing buying would boost the greenback while delaying such a move and spreading it out over a long period would weigh on the currency.

“Comments from Fed Chairman Jerome Powell at the post-decision press conference and the new forecast – especially for interest rates – are expected to shake up the markets.”

“Immediate support looks to 1.3630 daily low. This is followed by 1.36 August low and then 1.3570, last seen in July.

“Resistance is at 1.3690 Tuesday’s high and then at 1.3730 and 1.3810.”


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