GBP/USD: Boris kills the pound with his words ahead of the Fed

GBP/USD is under 1.39 as US yields make their way up. Boris' bodies' remarks make the pound powerless ahead of Powell while Tuesday's 4-hour chart is showing bears are improving their positions, Yohay Elam, an Analyst at FXStreet, briefs.

The UK PM's political troubles and speculation ahead of the Fed dominate trading

“‘Let the bodies pile high’ is better than having another lockdown – these insensitive comments attributed to UK Prime Minister Boris Johnson refuse to die down. Having to deal with scandals may hobble the government's efforts to push the economy forward despite the impressive vaccination campaign. That is weighing on the pound.”

“The Federal Reserve could be forced to acknowledge that America's economic boom may force it to taper its bond-buying scheme as soon as this year. That is the prerequisite for raising rates. Speculation is causing some tensions and somewhat keeping currencies in range.”

“Brexit is also an issue that could come to haunt the pound. Despite new EU offers on the Northern Irish protocol, progress has yet to be made. While covid overwhelms almost everything, leftovers from the Brexit deal still lurk in the shadows.”

“Pound/dollar is suffering from downside momentum on the four-hour chart and has recently slipped below the 50 Simple Moving Average – a bearish sign.”

“Initial support awaits at the daily low of 1.3680, followed by 1.3820 and 1.3810. Resistance is at 1.3925, the weekly peak, followed by 1.3950 and the all-important double-top of 1.4010.”