• The head of the Fed suggested that rates might need to rise further.

• The US dollar index rose by more than 1%.

• Data revealed that British house prices unexpectedly increased in February.

Today’s GBP/USD price analysis is bearish. On Tuesday, the pound fell to a two-month low versus the dollar after a Bank of England (BoE) policymaker warned that it would be exposed to other central banks’ outlooks. Soon after, the head of the Federal Reserve suggested that interest rates might need to rise further.

–Are you interested to learn more about CFD brokers? Check our detailed guide-

According to BoE rate-setter Catherine Mann, the pound could weaken if investors have yet to fully factor in aggressive Fed and European Central Bank (ECB) statements.

Mann’s remarks were made just a few hours before Fed Chair Jerome Powell testified before Congress. Powell’s comments indicated that the ultimate level of interest rates was probably going to be higher than previously anticipated. This caused the US dollar index to rise by more than 1%.

Money markets expect the BoE interest rate to peak in September at 4.75%. After ten consecutive rate rises starting in late 2021, it is now at 4%.

Moreover, traders are placing a 93% chance of a rate increase of 25 basis points when the central bank meets to make policy decisions on March 23. The likelihood of a 50-bps increase is now 7%. Before Powell’s speech on Tuesday, there was no possibility factored in that the BoE could increase rates by more than 25 basis points.

The pound momentarily surged to a one-week high in early London trading when data revealed that British house prices unexpectedly increased in February.

GBP/USD key events today

Investors will continue paying attention to Powell’s testimony which will continue today. There will also be an employment report from the US that will show the state of the labor market.

GBP/USD technical price analysis: Bears break out of consolidation

The 4-hour chart shows GBP/USD collapsing after breaking out of its range area. The price trades far below the 30-SMA with the RSI in the oversold region. This indicates extreme bearish momentum.

–Are you interested in learning more about spread betting brokers? Check our detailed guide-

The price had been trading within a range with support at 1.1925 and resistance at 1.2125 until bears managed to break below the range support. It is approaching the 1.1801 critical level and might pause before going lower or pulling back.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Read Next

USD/JPY Price Rally Stalls at 137.90, Eying US ADP NFP

The head of the Fed suggested that rates might need to rise further. The US dollar index rose by more than 1%. Data revealed that British house prices unexpectedly increased in February. Today’s GBP/USD price analysis is bearish. On Tuesday, the pound fell to a two-month low versus the dollar after a Bank of England (BoE) policymaker warned that it would be exposed to other central banks’ outlooks. Soon after, the head of the Federal Reserve suggested that interest rates might need to rise further. -Are you interested to learn more about CFD brokers? Check our detailed guide- According to…