GBP/USD Forex Signal 22/07: Steady Ahead Of Powell (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.3600.
• Add a stop-loss at 1.3320.
• Timeline: 1-2 days.

Bearish view

• Sell the GBP/USD pair and set a take-profit at 1.3320.
• Add a stop-loss at 1.3600.

The GBP/USD exchange rate rebounded on Tuesday as traders waited for the upcoming statement by Jerome Powell, the Federal Reserve Chair. It was trading at 1.3490, up from this month's low of 3370 Powell Statement Ahead

The GBP/USD pair rose sharply as investors bought the dip following the recent dip. It rose as market participants reacted to a statement from Scott Bessent, the Treasury Secretary.

In a statement, Bessent said that the Fed should be examined as an institution and whether it had been successful in its two mandates on the labor market and inflation.

The statement came in a CNBC interview that revealed Bessent's ad made the case against firing Jerome Powell, the bank's president. Trump as been complaining about Powell for months, arguing that he should cut rated from the current 4.50% to around 1%.

The president believes that the high interest rates were slowing the economy by affecting the labor market and other areas. He also argues that US rates were making it uncompetitive against its competitors, like the EU and China.

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Therefore, the GBP/USD exchange rate will react to a statement by Jerome Powell, the Fed Chair. He will likely explain why the Fed is taking time before cutting interest rates as Trump and Christopher Waller, another Fed official have suggested.

The pair will also react to a statement by Michele Bowman, another Fed official who has called for the bank to cut interest rates in the July meeting.

EURUSD Chart by TradingViewGBP/USD Technical Analysis

The GBP/USD exchange rate dropped and bottomed at 1.3370 last week as the US dollar index rebounded. It then bounced back to the psychological point at 1.3500 in the overnight session.

The pair has moved above the important support at 1.3428, the highest swing in September last year and the upper side of the cup-and-handle pattern. It remains above the 50-day and 100-day Exponential Moving Averages (EMA).

The Relative Strength Index (RSI) and the Stochastic Oscillator have all pointed upwards. Therefore, the token will likely remain in this range in the next few days.

The key resistance level to watch will be the psychological point at 1.3600. A move below the support at 1.3430 will invalidate the bullish outlook and point to more downside, potentially to the support at 1.3140, its lowest point in May.

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