- GBP/USD trades in a narrow band below 1.2700 early Wednesday.
- The Fed will announce policy decisions and Chairman Powell will hold a press conference later.
- The pair's technical outlook is yet to show a build-up of directional momentum.
GBP/USD touched it lowest level in two weeks below 1.2650 on Tuesday but managed to stage a rebound in the late American session. The pair holds steady below 1.2700 on Wednesday as investors gear up for the Federal Reserve's (Fed) policy announcements.
Pound Sterling price this week
The table below shows the percentage change of Pound Sterling (GBP) against listed major currencies this week. Pound Sterling was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.14% | 0.12% | -0.28% | -0.12% | -0.45% | -0.60% | -0.19% | |
| EUR | -0.14% | -0.01% | -0.40% | -0.24% | -0.56% | -0.73% | -0.33% | |
| GBP | -0.13% | 0.01% | -0.40% | -0.24% | -0.55% | -0.73% | -0.32% | |
| CAD | 0.27% | 0.41% | 0.39% | 0.16% | -0.16% | -0.32% | 0.08% | |
| AUD | 0.12% | 0.24% | 0.23% | -0.17% | -0.33% | -0.48% | -0.08% | |
| JPY | 0.43% | 0.56% | 0.71% | 0.15% | 0.31% | -0.17% | 0.25% | |
| NZD | 0.57% | 0.71% | 0.72% | 0.32% | 0.45% | 0.14% | 0.38% | |
| CHF | 0.20% | 0.32% | 0.31% | -0.08% | 0.09% | -0.25% | -0.40% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
The Fed is forecast to hold the policy rate steady at 5.25%-5.5% following the first meeting of the year. Several Fed policymakers pushed back against the market expectation for a rate cut in March ahead of the blackout period and helped the US Dollar stay resilient against its rivals.
The probability of a rate reduction in March declined from 80% earlier in the month to nearly 40% heading into the Fed meeting, according to CME FedWatch Tool. The USD Index (DXY), which tracks the USD's valuation against a basket of six major currencies, is up 2% in January.
If the policy statement, or Fed Chairman Jerome Powell, adopts an optimistic tone about the continuation of the disinflationary process and refrains from confirming that there won't be a rate cut in March, the USD could come under renewed selling pressure and allow GBP/USD to turn north.
On the other hand, the USD could gather further strength in case the Fed confirms a delay in the policy pivot, citing better-than-expected growth figures for the fourth quarter and relatively tight conditions in the labor market.
GBP/USD Technical Analysis
Critical resistance is located at 1.2700 (200-period Simple Moving Average (SMA), 100-period SMA and 50-period SMA). If the pair rises above that level and confirms it as support, 1.2760 (static level) and 1.2780 (static level) could be seen as next bullish targets.
On the downside, 1.2650 (Fibonacci 23.6% retracement of the latest uptrend) aligns as first support before 1.2600 (psychological level, static level) and 1.2560 (200-day SMA).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD retreats from daily highs, holds above 1.0800
EUR/USD loses traction but holds above 1.0800 after touching its highest level in three weeks above 1.0840. Nonfarm Payrolls in the US rose more than expected in June but downward revisions to May and April don't allow the USD to gather strength.
GBP/USD struggles to hold above 1.2800 after US jobs data
GBP/USD spiked above 1.2800 with the immediate reaction to the mixed US jobs report but retreated below this level. Nonfarm Payrolls in the US rose 206,000 in June. The Unemployment Rate ticked up to 4.1% and annual wage inflation declined to 3.9%.
Gold approaches $2,380 on robust NFP data
Gold intensifies the bullish stance for the day, rising to the vicinity of the $2,380 region following the publication of the US labour market report for the month of June. The benchmark 10-year US Treasury bond yield stays deep in the red near 4.3%, helping XAU/USD push higher.
Crypto Today: Bitcoin, Ethereum and Ripple lose key support levels, extend declines on Friday
Crypto market lost nearly 6% in market capitalization, down to $2.121 trillion. Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) erased recent gains from 2024.
French Elections Preview: Euro to “sell the fact” on a hung parliament scenario Premium
Investors expect Frances's second round of parliamentary elections to end with a hung parliament. Keeping extremists out of power is priced in and could result in profit-taking on Euro gains.