The FOMC Meeting Minutes today could influence GBP/USD depending on the Fed’s stance on rate cuts.
Key Points
- GBP/USD rose by 0.33% on Tuesday, driven by technical momentum and a weaker dollar.
- The dollar weakened due to anticipation of revised U.S. employment data and its potential economic impact.
- Early Wednesday saw GBP/USD slightly decline by 0.05% as the dollar rebounded.
GBP/USD Daily Price Analysis – 21/08/2024
On Tuesday, GBP/USD opened at 1.29896 and closed at 1.30334, marking a 0.33% increase. The British Pound strengthened against the U.S. Dollar as it approached its highest level since July 2023, buoyed by a mix of technical momentum and a weaker dollar. The dollar’s decline was attributed to market anticipation of revised U.S. employment data and concerns about the potential impact of these revisions on the broader economic outlook. Additionally, with many traders on summer break, the thin trading volumes likely exaggerated price movements.
As of today, GBP/USD opened at 1.30358 but has slightly dipped to 1.30270, reflecting a minor 0.05% decline. The pair remains in a precarious position, hovering around the 1.3030 level. Early in the Asian session, the pound lost some ground amid a stronger U.S. Dollar, which rebounded after reaching its lowest point against the euro this year. This rebound was fueled by cautious optimism ahead of key U.S. economic data releases later today, including revised non-farm payrolls and Fed Chair Jerome Powell’s speech at the Jackson Hole symposium.
Key Economic Data and News to Be Released Today
The FOMC Meeting Minutes will be the focal point today, with traders seeking clarity on the Fed’s stance regarding future rate cuts. Any indication of a less dovish outlook could strengthen the dollar and push GBP/USD lower. Conversely, signals of continued caution from the Fed might bolster sterling, especially if the market perceives it as supportive of the current interest rate environment. This release could set the tone for GBP/USD’s movement for the rest of the week, making it a crucial event for traders to monitor.
GBP/USD Technical Analysis – 21/08/2024
The GBP/USD chart shows a general bullish trend as the price remains above the 200 EMA, which is currently around the 1.30010 level. The price has recently tested resistance levels close to 1.30499 (R1), indicating strong upward momentum. However, the market has faced resistance, leading to slight pullbacks.
Given the current technical indicators, GBP/USD is likely to continue testing resistance levels, potentially moving towards the 1.30499 level again. However, any failure to break this resistance could lead to a short-term pullback, possibly to the support level around 1.30126 (R2). If the RSI moves higher without breaking above 70, it could signal further bullishness, but a drop below 50 might indicate a reversal or consolidation phase.
GBP/USD Fibonacci Key Price Levels 21/08/2024
Short-term traders planning to invest in GBP/USD today should keep a close eye on the following key price levels for the day:
| Support | Resistance |
| 1.29903 | 1.30499 |
| 1.29719 | 1.30683 |
| 1.29421 | 1.30981 |
Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.
