- GBP/USD caught some fresh bids on Friday amid some heavy selling around the USD.
- Powell’s dovish comments on Thursday, the upbeat market mood weighed on the USD.
- Bulls might now wait for a move beyond the 1.3300 mark before placing fresh bets.
The GBP/USD pair shot to fresh YTD tops during the early European session, with bulls now awaiting a sustained move beyond the 1.3300 round-figure mark.
Following the previous day's rather volatile price swings, the pair caught some fresh bids on the last trading day of the week and was being supported by the bearish sentiment surrounding the US dollar. The Fed Chair Jerome Powell on Thursday outlined the new monetary policy strategy and signalled an increased tolerance for higher inflation.
During the highly anticipated speech at the Jackson Hole Symposium, Powell said that the Fed is willing to allow inflation to run hotter than normal in order to support the labor market and broader economy. The remarks suggested that the Fed could keep rates lower for longer, which, in turn, exerted some heavy pressure on the greenback.
Apart from this, the prevalent upbeat market mood – as depicted by a strong rally in the equity markets – further undermined the USD's relative safe-haven status against its British counterpart. The GBP/USD pair jumped to the highest level since December 2019 and seemed rather unaffected by concerns about the lack of progress in Brexit talks.
In the absence of any major market-moving economic releases from the UK, the USD price dynamics might continue to act as an exclusive driver of the GBP/USD pair's momentum. Later during the early North American session, some second-tier US economic release will also be looked upon for some short-term trading opportunities.
Technical levels to watch
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