- Major currency crosses move in ranges ahead of major events.
- The Fed would announce a rise of 50 basis points, before important data from the US.
- GBP/USD consolidates around 1.2500, with a dominant bearish trend.
GBP/USD fell in the European session to 1.2465, reaching the lowest level in three days. It then recovered and bounced higher to 1.2524, marking a daily high. The pair remains calm above 1.2500 ahead of key events.
Traders are keeping an eye on upcoming events, which favors some calm in the markets for now. In the American afternoon, it is expected that the fed announce a 50 basis point interest rate hike and steps to start reducing the balance. No economic projections will be presented. On Thursday, for his part, it will be the turn of the decision of the bank of england, with an expectation of a rise in the rate of 25 basis points.
Before central bank decisions, on Wednesday there will be data that may have an impact on the US. with the ADP private sector employment change report for April. Foreign trade and service sector activity data will be released later with the S&P Global PMI and ISM. On Friday it will be the turn of the official employment report.
The Dominant trend in GBP/USD remains bearish. So far this week the pair has yet to hit new lows, while rallies have been limited, unable to sustain. The pound has been making downward highs. Volatility could be on the rise considering upcoming events.
“GBP/USD broke below 1.2500 for the third time in three sessions this morning. However, similar moves on Monday and Tuesday were quickly reversed. Still, it seems that it is now a matter of time before the pair makes a decisive bearish breakout: if not triggered by today’s FOMC announcement, it could be a consequence of tomorrow’s Bank of England monetary policy meeting, which we hope will defy hawkish expectations and add some pressure to the pound,” ING analysts said.
Technical levels
Source: Fx Street
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