GBP/USD: A dovish stance from the Fed is critical for a more meaningful rally

GBP/USD has struggled to bounce off the lows amid some calm around Evergrande. Will Powell power up the pound? The Fed Chair holds a press conference which could prove decisive for the market reaction, Yohay Elam, an Analyst at FXStreet, briefs.

See – GBP/USD: Hawkish policy surprise from the BoE is required to fuel the pound – MUFG

The pound is at the mercy of Powell

“Will Britain join the North American free trade deal? That idea has been floated by the press. While such a move would make no geographical sense, it could boost UK-US trade and provide sterling a much-needed shot in the arm.”

“The Fed is set to leave its policies unchanged but signal when and perhaps how it intends to taper its bond-buying scheme. Reducing purchases would boost the greenback while delaying such a move and spreading it out for a long time would weigh on the currency.” 

“Fed Chair Jerome Powell's comments in the post-decision press conference and the new forecasts – especially for interest rates – are set to rock markets.”

“Immediate support awaits at 1.3630, the daily low. It is followed by 1.36, August's bottom, and then by 1.3570, last seen in July.” 

“Resistance is at 1.3690, Tuesday's peak, and then by 1.3730 and 1.3810.”