GBP/USD Daily Price Forecast – GBP/USD Erased Gains Made in Previous Session Ahead of US FOMC Update

The GBPUSD pair has spent most of the day rallying on Tuesday going into the US session, as the British pound is enjoyed rally ahead on rumors and belief’s of interest rate hike during Thursday’s Bank of England Interest Rate decision meet. The pair on Tuesday hit an intra-day high of 1.31726, however renewed trade war fears in market owing to news of White house proposing higher tariffs on $200 billion in Chinese imports and investors shift of focus to US FOMC statement scheduled to release later today resulted in the pair moving downtrend across Asian market hours resulting in the pair losing majority of gains made in Tuesday’s trading session. The pair still has a strong hold on price action as the pair holds steady above 1.31 handle and as of writing this article the pair is trading at 1.3111 with 0.10% decrease in value. The market is expected to face lot of noise which could affect intra-day volatility to great extents in next 48 hours. While pair is expected to continue moving downtrend in case BOE MPC decides to leave interest rates unchanged the pair is expected to find strong support around 1.30 price handle.

Rate Hike Less Likely in Central Bank Policy Meet on Both Sides of Atlantic

Sterling traders are looking towards Thursday’s Bank of England (BOE) showing, where an anticipated rate hike from the UK’s central bank is beginning to look less likely after economic data for the UK economy continues to come out on the disappointing side, while today will be seeing the Markit Manufacturing PMI at 08:30 GMT, forecast to tick lower, from 54.4 to 54.2. Before Thursday’s BOE showing, the upcoming US session for Wednesday will be dropping a FOMC Policy Statement and Fed rate decision, leaving broader market bias firmly in the hands of Greenback traders once again, though expectations for a rate hike are on the low side as market participants are calling for a rate hike to follow in August., the National Institute of Economic and Social Research (NIESR) is urging the Bank of England to lift rates this week, though a quick U-turn on rates can’t be ruled out in the near future – as per report by Reuters .

The pair presents a neutral stance in the short-term and according to the 4 hours chart, as its currently hovering around a bearish 20 SMA, unable to move far from it, while developing well below the 200 EMA. The technical indicators have retreated within the positive territory and are now struggling with their mid-lines due to lack of directional strength. The GBPUSD pair is expected to continue range bound movement ahead of BOE’s Super Thursday when Carney & Co. will decide whether or not to hike rates. Expected support and resistance for the pair are at 1.3090, 1.3045, 1.3010 and 1.3150, 1.3190, 1.3230 respectively.