FxWirePro: GBP/USD slips lower as dollar firms after Warsh comments

• GBP/USD slipped lower on Friday after Fed Chair Kevin Warsh signaled that rate hikes could be needed if inflation does not appear to be returning toward the Fed’s 2% target.

•    In his debut Jackson Hole speech, Fed Chair Kevin Warsh said the Fed may “have work to do” if inflation fails to cool, noting that financial conditions remain insufficiently restrictive and hinting that further rate hikes may be needed.

• Warsh’s comments followed concerns from three Fed officials about persistently above-target inflation. However, Boston Fed President Susan Collins described the latest inflation data as “mixed” and said she still expects gradual disinflation

•  Expectations for at least a 25-basis-point Fed rate hike in September rose to around 50% after Warsh’s comments, up from roughly 35% before his speech...

•   Immediate resistance is located at 1.3597(Daily high), any close above will push the pair towards 1.3608(23.6%fib)

•  Strong support is seen at 1.3535(38.2%fib) and break below could take the pair towards 1.3468(Aug 14th low).

  Recommendation: Good to sell  around 1.3540, with stop loss of 1.3600 and target price of 1.3460