The British pound has pulled back a bit during the course of the trading session on Tuesday as we continue to see a lot of choppiness while the market try to figure out whether or not the Federal Reserve is looking to tighten sooner or later. Quite frankly, this is probably the only thing that people care about right now, and therefore you will see a bit of erratic trading when it comes to the US dollar itself.
GBP/USD Video 23.06.21
Looking at this chart, it is easy to see that the 1.37 level offers support, just as the 1.3950 level shows resistance. We could be going back and forth in this general vicinity for a while, until we get some type of clarity. Will Jerome Powell offer it in front of Congress? I certainly hope so, because then we can make a much more professional decision on what to do about the trade. At this point time, the market is likely to see a lot of questions asked about the direction of the US dollar, which of course drives most of the Forex markets in general. I think at this point, we are still very much in an uptrend but if Powell or one of the other Federal Reserve officers get the market spooked again, we could see this pair breakdown rather rapidly.
At this juncture, I suggest that perhaps pound will do something to keep the markets calm, and therefore the US dollar losing value over the longer term, but it is not until we break above the 1.40 handle that I would be comfortable buying the British pound again, recognizing that we have a lot of work to do to break out above the recent highs.
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