GBP/USD regains 1.1500 after Fed’s Powell, UK PM Truss inspired volatility
- GBP/USD picks up bids to pare the previous day’s mild losses after a volatile day.
- Fed’s Powell advocated for stronger fight with inflation, below trend growth.
- UK PM Truss announced details of her energy plan, British Queen Elizabeth II died.
- Risk catalysts will be crucial amid a light calendar, inflation eyed.
GBP/USD consolidates the recent losses around 1.1515, after an active day, as traders reassess latest catalysts during Friday’s sluggish Asian session. In doing so, the Cable pair also cheers the energy plan of UK PM Liz Truss while showing less reaction on the death of the British Monarch Elizabeth II.
British Prime Minister (PM) Truss announced on Thursday the government will introduce a two-year "energy price guarantee" and explained that a typical household will pay no more than £2,500 a year on energy bills. “Treasury announcing a joint scheme working with BOE to address extraordinary liquidity requirements faced by energy firms, worth £40 billion,” added UK PM Truss.
On a Brexit page, UK PM truss also mentioned, per the UK Express, that she wants a “negotiated solution” to the row warning it must “deliver all the things” the UK has demanded before.
Elsewhere, Fed Chairman Jerome Powell said on Thursday that they need to act forthrightly and strongly on inflation, as reported by Reuters. "We think by our policy moves we will be able to put growth below trend and get labor market back into better balance," added Fed’s Powell.
It should be noted that the a sustained decline in the US Weekly Initial Jobless Claims to the lowest levels since May, with the latest figures beyond 222K, joins recent headlines concerning the US-China trade ties, to favor the market sentiment and underpin the GBP/USD rebound.
Against this backdrop, Wall Street closed with mild gains while the US 10-year Treasury yields rose to 3.32%.
Looking forward, a light calendar may restrict moves while China’s Consumer Price Index (CPI) and Producer Price Index (PPI) may offer intermediate moves ahead of next week’s US CPI. Even so, risk catalysts around the UK politics and Brexit may keep the GBP/USD traders busy.
Technical analysis
Bullish RSI divergence keeps GBP/USD buyers hopeful inside a monthly falling channel between 1.1520 and 1.1300. Also acting as an upside filter is the 50-SMA near 1.1560.