The sterling pound fights the US dollar before the Fed policy decision

• The sterling pound is debated around 1.3000 against the US dollar waiting for the Fed monetary policy decision, the points graph and economic projections.
• Investors expect the Fed and the BOE to maintain stable interest rates this week.
• The feeling of the market is still cautious since US President Trump is about to impose reciprocal tariffs on April 2.

The sterling pound (GBP) struggles to extend the rebound above the key level of 1.3000 against the US dollar (USD) during the European negotiation hours on Wednesday. The GBP/USD torque quotes with caution waiting for the monetary policy decision of the Federal Reserve (FED) at 18:00 GMT.

According to the CME Fedwatch tool, the Fed is sure of maintaining interest rates without changes in the 4.25% -4.50% range per second time. Therefore, the main catalyst for the US dollar will be the FED points graph, which shows where the policy responsible for the rate of federal funds in the medium and long term, and the summary of Economic Projections (SEP) of the Federal Open Market Committee (FOMC) see.

It would be interesting to know if Fed officials will see a relaxation of inflationary pressures and a decrease in consumer confidence in the current scenario or increasing consumer inflation expectations due to the economic policies of the president of the United States (USA), Donald Trump, while predicting the monetary policy perspective. In February, the Consumer Price Index (CPI) annual underlying – which excludes volatile food and energy prices – increased 3.1%, the lowest level seen since April 2021.

According to Fitch analysts, it is estimated that tariff shocks “will accelerate inflationary pressures at a percentage point” in the short term. This scenario will discourage Fed officials to cut interest rates before the last quarter of the year. Meanwhile, the CME Fedwatch tool shows that the Fed will cut interest rates at the June meeting.

What moves the market today: the sterling pound remains alert before the BOE decision and the United Kingdom’s employment data

• The sterling pound is quietly in front of its peers waiting for the United Kingdom labor market (UK) for the three months that end in January and the monetary policy decision of the Bank of England (BOE), scheduled for Thursday. Investors will pay special attention to the average profit data, a key measure of salary growth that has contributed significantly to high inflation in the services sector.
• The leading global data supplier on people, analysis and information from the United Kingdom, Brightmine, showed on Tuesday that salary growth has slowed since business owners are cautious before the implementation of an increase in payroll taxes as of April. The Treasury Chancellor of the United Kingdom, Rachel Reeves, announced an increase in the contribution of employers to the National Insurance (Ni) from 13.8% to 15% in the Autumn Budget.
• Brightmine also said that a significant number of companies has planned a freezing or restructuring of equipment in response to the government’s decision to increase the social security contributions of employers, with some considering salary freezing and delays in increases, according to Reuters. Meanwhile, economists expect the average profits (excluding and including) bonuses to have constantly grow by 5.9%.
• The BOE is expected to maintain stable interest rates by 4.5%, with a division of votes of 7-2. It is expected that the members of the Monetary Policy Committee (MPC) of the BOE, Catherine Mann and Swati Dhingra, support a cut of interest rates, while the other seven responsible for the policy will vote to keep the rates without changes. Investors will pay special attention to the comments of the Governor of the BOE, Andrew Bailey, on the economic perspective of the United Kingdom in the midst of the tariff policies of President Trump.
• On Tuesday, US Treasury Secretary Scott Besent confirmed in an interview with Fox Business that reciprocal tariffs would go into force on April 2. Besent added that it is optimistic that some of the tariffs may not have to apply because an agreement can be “pre-negotiated” or that once countries receive their “reciprocal tariff number”, they will come to us and want to “negotiate it down.”

Technical Analysis: The sterling pound maintains a key support of 1,2900

The sterling pound seeks a new trigger to extend its two -month rebound above the key level of 1.3000 against the US dollar on Wednesday. The GBP/USD bulls take a break since the 14 -day relative force index (RSI) reached overstroke levels above 70.00. However, this does not reflect that the upward trend is over. The upward trend could be resumed once the Momentum oscillator cools to about 60.00.

The exponential mobile means (EMA) of 20 days and 50 days advancing about 1,2830 and 1,2690, respectively, suggest that the general trend is upward.

Looking down, the 50% fibonacci setback in 1,2770 and the 38.2% fibonacci setback in 1,2614 will act as key support areas for the torque. On the positive side, the maximum of October 15, 1,3100 will act as a key resistance zone.