GBP/USD: Will its regain 1.3300 ahead of UK PMI? FOMC on sight
- Rejected just shy of 1.33 handle.
- Keeps range near 50-DMA.
- A busy calendar ahead – Fed in focus.
The GBP/USD pair consolidated the recent upsurge near 50-DMA at 1.3270 levels, having faced rejection just below 1.3300 in early Asia, with the focus now shifting towards the UK manufacturing PMI data and FOMC decision for fresh direction.
GBP/USD: Bulls take a breather
The spot extended its overnight bullish momentum and went on to hit fresh two-week highs at 1.3293 in Asia this Wednesday, after pound was boosted on the comments delivered by the UK’s Brexit Secretary Davis and increased hopes of a BOE rate hike tomorrow, especially after the UK’s NIESR stated that it expects the BOE tightening cycle to begin this Thursday.
However, the upside lost traction last hours, as the USD bulls regained footing on the US house tax committee Chairman Brady’s remarks, noting that “in consultation with Trump and our leadership team, we have decided to release the bill text on Thursday”. The USD index now prints daily tops at 94.59, extending the bounce from near 94.40 levels.
Despite the latest leg down, Cable remains supported amid better sentiment towards risk assets and on expectations of a positive surprise likely to be delivered on the UK manufacturing PMI release.
Also, of note remains the US ADP jobs and ISM manufacturing PMI reports lined up for release in the American session today before the Fed outcome.
GBP/USD Technical View
Valeria Bednarik, Chief Analyst at FXStreet, explained: “The pair is a handful of pips above the 23.6% retracement of its early October rally, and in the 4 hours chart, above horizontal moving averages, with technical indicators losing bullish steam near overbought levels, overall positive. Further gains, however, will depend on how the market reacts to Thursday’s news from the US on Fed’s head, and the BOE, on what’s next on monetary policy. October high of 1.3336 is the critical resistance to surpass to open doors for additional gains ahead. Support levels: 1.3260 1.3220 1.3180 Resistance levels: 1.3300 1.3335 1.3360.”