Currencies

The pair rose on Wednesday helped by Mr Powell’s Congress testimony, which cemented the policy divergence between the Fed and the ECB, but trades with caution today

Last week saw the Fed’s hawkish pause. This week will bring it back into the spotlight as Fed Chair Powell presents two days of Congressional testimony regarding the central bank's policy on interest rates. On Wednesday, he will address the House Financial Services Committee, followed by the Senate Banking Committee on Thursday.

The hourly chart pulled back to the 38.2% Fibonacci and price support around the 1.0908 level. This served as a short-term platform for buyers to regroup.

The GBPUSD weekly has charted a higher trough followed by a higher peak. This puts the forex pair into an uptrend. The weekly RSI is on the bullish side of 50 (green rectangle). The longer it persists on this side, the greater the likelihood of further primary trend appreciation.

Watch today’s US Open for insights on the status quo US inflation report ahead of the Fed’s pivotal policy decision, the strong jobs report from the UK that keeps pressure on the Bank of England for further monetary tightening and more

Today’s employment report showed an increase in wages in the UK, which keeps pressure on the bank of England for further monetary tightening , sending the pair higher, but US inflation and Fed decision loom

There is generally a positive relationship between FXCM’s USDOLLAR basket and the US fixed income market. Therefore, it is surprising that the USDOLLAR charted a lower peak whilst the US 2-year note’s momentum increased (as represented by the shift up in trendline on the top chart).

The pair is constrained at a critical technical region as markets brace for pivotal policy meetings by the US Fed and its European counterpart later this week

Watch today’s US Open for insights on the Bank of Canada decision to restart rate hikes, Eurozone’s unexpected first quarter contraction and more

The USDOLLAR has continued to move inside its neutral channel this week.

The pair remains suppressed, following yesterday’s drop to new month lows, as the BoC restarted its hiking cycle with a 0.25% rate increase that surprised markets