The GBP/USD pair sees interest from buyers near 1.3430 in the early hours of European trading on Monday. The Greenback weakens against the Pound Sterling following remarks from Federal Reserve Chair Jerome Powell, who indicated that US President Donald Trump threatened him with a criminal indictment, which has heightened concerns regarding the independence of the central bank. GBP/USD moves upward, approaching 1.3430 during the early European session on Monday. Federal prosecutors have initiated a criminal investigation concerning the actions of the Fed’s Powell. Further consolidation remains a possibility in the near term as the RSI stays around the midline. The initial downside filter to monitor is 1.3358; the immediate resistance level appears at 1.3458.
The US Justice Department issued subpoenas to the agency and indicated the possibility of a criminal indictment concerning testimony provided to a Senate committee regarding renovations to Federal buildings. Powell characterized the investigation as “unprecedented” and expressed his belief that it was initiated because he incurred Trump’s displeasure by not lowering interest rates despite ongoing public pressure from the president. “This open warfare between the Fed and the U.S. administration … it’s clearly not a good look for the U.S. dollar,” remarked Ray Attrill, head of currency strategy at National Australia Bank.
Market participants will pay close attention to the UK jobs data released later on Tuesday, as it may provide insights into the prevailing expectations regarding the Bank of England’s monetary policy trajectory. Should the reports indicate outcomes that fall short of expectations, this may exert pressure on the Cable in the short term. In the daily chart, the 100-day EMA is on an upward trajectory, offering support at 1.3358, while the price remains above this longer-term average, maintaining the overall upward bias. The RSI reading of 51.90 indicates a neutral position and is trending upwards, suggesting that momentum is stabilizing following the recent pullback. A consistent hold above the average may set the stage for a retest of 1.3458, maintaining the recovery trajectory.
The price is positioned slightly under the Bollinger middle band at 1.3458, with the bands exhibiting a contraction, indicating a period of diminished volatility and consolidation. The RSI at approximately 52 supports a range-bound sentiment; a strong upward movement would enhance potential for gains. A close above the midline may lead to a movement toward the upper band at 1.3552, while a decline toward 1.3365 could activate the lower band and increase the likelihood of a more significant pullback.