• The Fed is causing volatility in financial markets and GBP/USD bulls need to get above the resistance of 1.2125.
• 1.2100 area would be expected to act as support in the near term. 

At 1.2137, GBP/USD is bid and has tallied over 1.2% of gains on the day in a short squeeze that has come about during the Federal Reserve's chairman's comments in the press conference that has followed today's interest rate hike of 75bps. 

In what has been the biggest hike since 1994, the Fed has raised the benchmark interest to leave the target range standing at 1.50% - 1.75%. This was in line with expectations and as a consequence, there had been a  slow reaction in financial markets.

• Fed swaps price 75bp rate hike for July; 140bp over July/Sept.
• US rate futures price in 93.4% chance of 75 bps hike in July; 55% probability of 50 bps rise in September after Fed decision - CME's FEDWATCH.

However, during the presser, chairman Jerome Powell pushed back against the market's aggressive expectations of a series of big interest rate hikes. Powell said either 50bps or 75bps are most likely at the next meeting but that he does not expect 75bps moves to be common. Consequently, the USD dollar and short-term rates have eased back from their initial post-Fed rate hike highs on the day and this has given sterling bulls and the US stocks some relief. 

GBP/USD technical analysis

The price is carving out a channel to the upside and the bulls will need to get above the resistance of 1.1225 to open risk towards 1.22 the figure. 1.2100 area would be expected to act as support in the near term.