GBP/USD breaks the 1.3600 threshold as Fed's Powell testifies at the US Senate

• The British pound continues rallying for the third day in a row.
• A mixed-market mood and an absent UK economic docket were not an excuse for GBP bulls to push the pair higher, courtesy of a weaker US dollar.
• GBP/USD is upward biased, though a daily close above 1.3600 would cement the pair’s chances to reach 1.3700.

During the New York session, the GBP/USD climbs above the psychological 1.3600 figure, trading at 1.3618 at the time of writing. The market sentiment shifted from a risk-on mood to mixed as the Federal Reserve Chairman Jerome Powell testifies against the US Senate Banking Committee on his re-nomination to head the US central bank.
 

Federal Reserve policymakers agree on a balance sheet reduction

An absent UK economic docket that would be packed on Friday left the GBP/USD pair at the mercy of US dollar developments.

Before Wal Street opened, three Federal Reserve regional presidents crossed the wires. Atlanta’s Fed President Bostic said that he “penciled three hikes on the December meeting,” but as of today, he foresees that one more could be needed. Concerning reducing the balance sheet as soon as possible,  he coincides with Cleveland’s and Kansas City Fed Presidents Loretta Mester and Esther George.
Jerome Powell, Federal Reserve president, is crossing the wires at press time. So far, he said that the Fed would use their tools to get inflation towards the central bank target and emphasize that the US economy no longer needs accommodation. Powell further noted that the US central bank needs to focus more on inflation than the maximum employment goal

Follow Jerome Powell's remarks in FXStreet’s live coverage here.

GBP/USD Price Forecast: Technical outlook

The GBP/USD is neutral-upward biased, despite trading below the 200-day moving average (DMA,) which sits at 1.3736, well above the spot price. At press time, it is trading above 1.3600, a level that was last seen on November 11, 2021, a signal that opens the door for a test of the 1.3700 figure, though there would be some hurdles on the way up.

The first resistance would be the R2 daily pivot at 1.3644. A breach of the latter would expose November 4, 2021, daily high at 1.3699, followed by the 200-DMA.