- The dollar rises in the market due to a cautious climate in the markets.
- The two-day FOMC meeting begins.
- GBP/USD falls after hitting three-week highs.
The GBP/USD is falling on Tuesday, snapping a three-day gain streak in a row. Hours ago, the pair had reached as high as 1.2091, the highest level in three weeks, but then reversed direction. It recently fell to 1.1962, and remains below 1.2000, with a negative intraday tone.
The pair’s decline found support above Monday’s low. Should 1.1960 give way further downside could be expected with the next major support at the 1.1920 area. To the upside, a return above 1.2045 could bring the pound back to strength. Above is the 1.2080/90 area, which contained the recent rally. A confirmation above would point to an extension of the rally.
The dollar gets stronger
The GBP/USD decline was mainly seasoned by a stronger dollar in a context of caution in the markets. Wall Street futures are trading negative. At the same time, demand for Treasury bonds rises. DXY rises after three days and returns above 107.00.
The dollar gains momentum on the day of the start of the FOMC meeting. On Wednesday it is expected that Federal Reserve announce a 75 basis point hike in the interest rate. US data on home prices, new home sales and consumer confidence will be released on Tuesday.
In the UK, this week there will be no key data. The race for the succession of Boris Johnson yesterday had the first television underdog between Rishi Sunak Y Liz Truss.
Technical levels
Source: Fx Street
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