Core Viewpoint - The GBP/USD exchange rate remains strong around 1.3530 following a dovish signal from Fed Chair Powell at the Jackson Hole global central bank conference, which has boosted investor risk appetite [1][2][8] Group 1: Federal Reserve Insights - Powell indicated a willingness to adjust the restrictive monetary policy stance due to changing risk balances and the current restrictive nature of monetary policy [3] - He warned of rising downside risks in the labor market, which could necessitate policy adjustments [3] - Powell downplayed the long-term inflation risks posed by tariffs, suggesting that the likelihood of sustained inflation due to tariffs is low given labor market challenges [4] Group 2: Market Reactions - The dovish tone from Powell has pressured the US dollar and US Treasury yields, with the DXY index struggling around 97.60, close to a four-week low, and the 10-year Treasury yield hovering around 4.27% [2] - Investors are closely watching the upcoming US July Personal Consumption Expenditures (PCE) price index, a key inflation indicator for the Fed [4] Group 3: UK Economic Challenges - Bank of England Governor Andrew Bailey highlighted severe challenges facing the UK economy, including a declining labor participation rate since the COVID-19 pandemic, which has weakened potential economic growth [5] - Bailey warned that labor market issues are likely to persist due to ongoing demographic trends, such as an aging population [5] Group 4: Technical Analysis of GBP/USD - The GBP/USD exchange rate has formed an "inverse head and shoulders" pattern, indicating a bullish reversal signal, with the neckline around 1.3580 [7] - The short-term trend for GBP/USD has turned bullish as it trades above the 20-day EMA, currently at approximately 1.3466 [7] - Key support is identified at the August 11 low of 1.3400, while resistance is noted near the July 1 high of 1.3790 [7]