GBP/USD - Inverted Hammer awaits bullish follow through

Wednesday's inverted hammer candle on the GBP/USD chart offers a ray of hope for GBP bulls, although the strong US data releases and the heightened odds of the Fed rate hike in December could play spoil sport.

Focus on speeches from Fed officials and BoE's Andy Haldane

Fed policymakers - Powell, Williams, Harker and George - are scheduled to speak today. Politico reported on Tuesday that Treasury Secretary Steven Mnuchin favors Powell for Fed chair and that Warsh was also a front-runner. Thus, Powell's comments could yield big reaction in the USD pairs.

Markets would boost the odds of Powell becoming the next Fed Chief if the policy maker talks about bank deregulation (Trump administration's agenda), in which case the USD stands to lose as Powell is widely believed to be less hawkish than Warsh.

Meanwhile, across the pond, BoE's Andy Haldane is scheduled to speak at 1730GMT. Haldane could repeat that a rate hike would be a good news story. Hawkish comments from Haldane could lift the British Pound.

GBP/USD Technical Levels

A bullish follow through to Wednesday's inverted hammer candle would confirm a bullish reversal. It would mean the sell-off from the high of 1.3657 has ended.

FXStreet Chief Analyst Valeria Bednarik writes, " From a technical point of view, the pair is within a consolidative phase, but with the scale lean towards the downside, as the recovery stalled well below a major Fibonacci resistance at 1.3340, and the risk won't change bias as long as the price remains below this level. In the 4 hours chart, the 20 SMA has extended its decline, now offering a dynamic resistance at around 1.3295, while the Momentum indicator aims higher within negative territory, but the RSI indicator already turned south, now at 36 anticipating some further slides ahead, to be confirmed on a break below 1.3220, this week low.