Bearish view

 Bullish view

The GBP/USD exchange rate bounced back as the US dollar index (DXY) retreated after a statement by Jerome Powell, the Federal Reserve chair. The pair rose to 1.2685, higher than this week’s low of 1.2615. FOMC minutes aheadThe US dollar retreated after a statement by Jerome Powell who said that the Fed welcomed the recent encouraging inflation numbers.A report released in June showed that the headline and core Consumer Price Index (CPI) retreated slightly in May. A separate report on Friday revealed that the core personal consumption expenditure (PCE) dropped for the first month in May.Powell, however, noted that the bank would be patient when determining when to start cutting interest rates. He believes that the economy is in a good shape and was not in an urgent need for a rate cut.Most analysts expect the Fed will start cutting interest rates in December if inflation continues falling. Some, however, like Mohamed El Erian, believe that the bank should slash as soon as in the next meeting since high frequency data shows that the economy is slowing.The next important events to watch will be the upcoming services PMI numbers from the UK and the US. Economists believe that the data will show that the services sector did well in June as it continued to outperform the manufacturing industry.ADP will also publish its estimate of the private payrolls data. The estimate is that the private sector created159k jobs in June after adding 158k in the previous month. These numbers will come ahead of the official nonfarm payroll data.The Fed will publish minutes of the last meeting in which the committee left interest rates unchanged between 5.25% and 5.50%.The other important event will be Thursday’s UK election in which the Labour Party is expected to win, with Keir Starmer becoming the next prime minister. GBP/USD technical analysisThe GBP/USD price retreated to the key support at 1.2615 on Tuesday and then quickly bounced back after Powell’s statement. This week’s lowest point was an important level because it was also its lowest point on June 27th and the first support of the Woodie pivot point.The pair bounced back and was trading at 1.2687, its lowest swing on the last day of May. It has also risen above the 50-period moving average and the 38.2% Fibonacci Retracement point.Therefore, the pair will likely resume the downward trend as traders wait for the FOMC minutes and the UK election. If this happens, it will likely retest this week’s low of 1.2615.More By This Author:AUD/USD Forex Signal: More Gains Ahead Of The FOMC Minutes BTC/USD Forex Signal: Bitcoin Loses MomentumEUR/USD Forex Signal: Euro is at Risk of Retesting June Lows