Global markets are reeling this morning following renewed weekend threats against Jerome Powell by the Trump administration. Fed independence remains a non-negotiable anchor for equity markets, the greenback, and the health of the international financial order. The problem is that throughout Trump’s second term, the Chairman has been under constant pressure to resign, and the situation has now reached a fever pitch.
After sending numerous threats regarding a “too-high” Fed funds rate at the beginning of his second term, US President Trump appeared to have moved on from his attacks on the central bank.
Looking at how the week is beginning, Trump seems to be looking for new ways to fire the head of the Fed, even as his term is about to end in May 2026.
The Department of Justice just opened a federal criminal investigation into Federal Reserve Chair Powell about two weeks before the FOMC meeting (January 28), immediately sending markets into a risk-off mood.
Metals are exploding to new record highs, the US dollar is plummeting, stocks are falling, and yields are rising — a perfect storm for a pursued ’debasement trade’, a major theme for markets in 2025.
Regarding the US dollar selloff, it currently lags its major currency peers, which sends GBP/USD to test the high bounds of its 1.34 to 1.36 trading range.
The pound wasn’t having an easy start to 2026, as inflation fears seem to abate somewhat, and traders will now look for clues on future cuts depending on the outcome of next week’s labor report (January 20).
Failing to do so would strengthen the consolidation before the month-end FOMC meeting.
GBP/USD 4H chart, January 12, 2026. Source: TradingView. Past performance is not indicative of future results.
GBP/USD technical levels:
Resistance levels
- Resistance zone around 1.35
- Past week and 2026 highs at 1.35680
- Resistance turned pivot at the 1.36 zone
- Next main resistance 1.37 zone
Support levels
- Mid-range pivot 1.3450 to 1.34650
- 1.34660 4H 50-period moving average
- 1.34 Range lows support
- Pivotal support 1.3260-1.33
This article is for general information purposes only, not to be considered a recommendation or financial advice. Past performance is not indicative of future results. It is not investment advice or a solution to buy or sell instruments.
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