GBP/USD: bulls step in for space on 1.39 handle despite Powell's optimism

Sterling bulls do not seem to accept a stronger dollar in light of Fed Chair Powell's optimism for a full recovery in the US economy and inflation target being met this year. Currently, GBP/USD is trading at 1.3899, down -0.47% on the day, having posted a daily high at 1.3998 and low at 1.3858.

Fed’s Powell LIVE testimony to Congress: does not see a risk of a recession

Instead, cable recovered from the 1.3857 lows and bounced to find territory on the 1.39 handle again on the hourly sticks. Overnight, cable was up to threaten 1.40 in early European trade on the back of M&A news with Comcast offering 22.1 billion pounds cash for Sky, (GBP 12.50 per share,  Significantly higher than the GBP 10.75 per share agreed by Fox in Dec 2016). However, the pound was anchored again on large 1.40 option expiries today, (more tomorrow).

Latest on Brexit

In terms of the latest on Brexit, the Bank of England will not "go soft" on EU insurance rules and BoE's Woods said that avoiding Brexit chaos was a "top priority".

GBP/USD levels

A key level t the upside comes as the 21-D SMA at 1.3990/00 as this would be breaking the descending resistance. Closes there would alleviate some bearish pressures. 1.4150/80 come as two very key levels thereafter with the 200-week moving average is located at 1.4332 on a break of those levels. On the flip side, 1.3800 remains a target on closes below 1.3920 -(1.3770 is key below there ahead of 1.3658 level as being the September peak).