In the near term and according to the performance on the hourly chart, it seems that the GBP/USD currency pair is trading within the formation of a weak ascending channel.
The losses of the GBP/USD pair during last week’s trades were the strongest as they fell to the lowest support level of 1.1717 since the collapse of the markets at the height of the 2020 Corona epidemic.
At the end of the week, the pair tried to recover to the resistance area of 1.1900, but with Jerome Powell’s confirmation of moving forward in raising the American interest rate to contain the standard inflation in the United States, he brought more strong momentum to the American dollar and therefore the sterling dollar pair moved towards the support level of 1.1735 , closing around it.
The Pound Sterling quickly gave up its gains against the dollar after Federal Reserve Chairman Jerome Powell said businesses and households would face an increasing struggle as the bank will raise US interest rates further to lower US inflation. He said this in opening remarks at the Jackson Hole Symposium hosted by the Federal Reserve Bank in Kansas City.
„July’s increase in the target range was the second increase of 75 basis points in the largest number of meetings, and I said then that another large, unusual increase might be appropriate at our next meeting,” told Powell to a gathering of central bank governors
And much of the widely anticipated speech focused on three lessons for policymakers to draw from the Fed’s experience with inflation in the 1970s and 1980s, but not before Powell said continued increases in interest rates and the passage of time would be necessary to reduce inflation.