GBP/USD hits new highs above 1.1550 on weak dollar

• The dollar falls across the market on Tuesday, at the start of the Fed meeting.
• The pound is stable, on Thursday the BoE.
• GBP/USD manages to bounce after approaching 1.1450.

The dollar weakness is boosting GBP/USD on Tuesday. The pair climbed to 1.1565, posting a fresh intraday high, thus extending the recovery from nearly a week’s low at 1.1460.

With the rise, GBP/USD avoids a drop below 1.1450, which if confirmed would take momentum from the pound favoring a downward correction, which could extend to the 20-day moving average (1.1320). On the upside, between 1.1600 and 1.1640 there is a resistance zone, which if left behind could position the pair for more rises.

The greenback falls on all fronts on the day of the start of the two-day meeting of the Federal Reserve. On Wednesday, he is expected to announce a 75 basis point hike in the interest rate. The expectation is set in the statement and the guideline for the future. It is speculated that the signal will be for softer rises in the future. This adds to the negative pressures on the dollar.

The Treasury yields are falling. The 10-year tranche yields 3.92%, after having exceeded 4.10% on Monday, while the two-year tranche stands at 4.40%, far from the 4.50% hours ago.

US manufacturing data will be released on Tuesday. Then the focus will turn to employment data for Wednesday (ADP) and Friday (NFP). This, together with the Fed’s decision, can generate a lot of movement in the market.

In the United Kingdom, Prime Minister Rishi Sunak and the Finance Minister said that Britons cannot be prevented from paying more taxes. They ruled out increased taxes on income and value added. On Thursday, the Bank of England will announce its monetary policy decision.

Technical levels