GBP/USD rebounds from 1.3845 back to 1.3880 ahead of the FOMC statement
- US dollar mixed ahead of Fed’s decision.
- GBP/USD retreats on Wednesday, still looking bullish.
The GBP/USD printed a fresh daily low during the American session at 1.3843 and then rebounded rising back to the 1.3870 area, near the level it closed on Tuesday. Market participants await the outcome of the two-day FOMC meeting.
The rally of GBP/USD found resistance at the 1.3900 barrier and pulled back. Despite the bearish correction to 1.3840/45, the short-term bias still point to the upside. The pound needs to break the 1.3900 level to clear the way to more gains.
Price action remains limited ahead of the FOMC statement. In Wall Street, stocks area mixed and US yields are modestly higher, offering some support to the greenback. The DXY is up 0.10%, at 92.55.
At 18:00 GMT the Federal Reserve will release its statement. No change is expected. The tone of the central bank will be watched closely for clues about the future. Analysts at BBH expect a modestly hawkish hold, “as the Fed is likely to acknowledge ongoing inflation risks and continues with its discussions of tapering. Tapering could be mentioned in the official statement, which would be a very hawkish surprise.” There won’t be new macroeconomic forecasts.
Technical levels