- The pound remains near the highs in several days.
- 1.3900 zone is a key resistance, which is on the radar.
- Market waiting for the Federal Reserve’s words.
The GBP / USD is trading unchanged around 1.3870, on Federal Reserve Day. The price approached 1.3900 hours ago but could not overcome that level and undertook a retracement, finding support at 1.3860.
The range runs of GBP / USD imply a consolidation, following a strong bullish rally that started a week ago from levels near 1.3560. For now, the 1.3900 zone has slowed these advances. The tone and the very short-term trend remain firmly bullish.
The support for the pound comes from the side of the latest economic reports from the United Kingdom and the casualties in COVID-19 cases, which had raised concerns and fears of new restrictions.
The The dollar made modest gains on Wednesday, driven by a rise in Treasury yields. The 10-year rate is at 1.26%, advancing 1.45% on the day.
However, limited tours predominate, as the focus is on the Federal Reserve meeting. The FOMC is expected to maintain the interest rates and buyout program, repeating most of the message. The focus of attention will be on the signals regarding the buy program and when a cut to it could begin to be analyzed. Powell’s conference could have an impact on the dollar.
Break of 1.3900 may be key
GBP / USD 1.3900 zone is strong resistance that slowed gains on several occasions in July. The breakout and confirmation above could give the pair a further bullish momentum, initially at 1.3960 and if it continues, a test at 1.4000 is not ruled out.
Immediate support is seen at 1.3860, followed by 1.3830 and then 1.3750. A return below 1.3800 would take the pair bullish, while a yield of 1.3720 would increase the downward pressure.
Technical levels
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