GBP/USD rises to fresh 3-week highs as US Dollar tumbles on Trump’s tweets
|- US Dollar drops sharply across the board amid expectations of US President Trump announcement.
- Cable gains momentum and hits news highs for the current month.
The GBP/USD pair moved quietly for hours, ignoring Powell and also the new Chinese tariffs of US products but recently it reacted to the big decline of the greenback. Cable is moving toward 1.2300, trading at 1.2276, the highest since late July.
Trump moves markets
The US Dollar was already weak against majors following new Chinese tariffs to US products and also from comments coming from Jackson Hole, that included Fed’s Powell. Now market participants are expecting a new announcement from US President Trump. He recently tweeted: “....My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”. He criticized again the Fed and previous trade policy with China. Later added he will respond to China’s tariffs this afternoon.
The DXY extended losses while at the same time Gold gained more than $30 from the lows. The GBP/USD pair holds a bullish tone, despite the decline in equity prices in Wall Street, supported by US Dollar weakness.
Levels to watch
On the upside, the next resistance is seen around 1.2290 followed by 1.2330 and 1.2380 (Jul 17 low). On the flip side, support levels might now be seen at 1.2240, 1.2190 (July 23 low) and 1.2110. Volatility is likely to remain elevated over the next hours until the close expecting Trump’s announcement and also following speeches from key central bankers in Jackson Hole.
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