“¢ A modest USD rebound prompts some profit-taking at higher levels.
“¢ Today’s key focus would remain on the release of FOMC meeting minutes.
The GBP/USD pair traded with a mild negative bias through the early European session and eroded a part of previous session’s strong up-move to near two-week tops.
The pair struggled to build on its positive momentum beyond the 1.2900 handle and now looks to snap four consecutive days of winning streak. With investors looking past the US President Donald Trump’s critical comments on the Fed’s policy tightening, the US Dollar caught some bids on Wednesday and was seen as a key factor exerting some downward pressure.
Today’s modest pull-back could also be attributed to some long-unwinding/profit-taking, especially after the recent upsurge of over 250-pips from a 13-month low level of 1.2662 set last Wednesday. The up-move was further supported after the EU’s Barnier and UK’s Raab, the two chief Brexit negotiators, agreed on the need to speed up the pace of Brexit negotiations.
In absence of any major market moving UK economic data, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum. The market focus now shifts to the latest FOMC meeting minutes, which will be looked upon to reinforce September rate hike prospects and should eventually extend some support to the greenback.
Ahead of today’s key event risk, the release of July existing home sales data from the US and any incoming Brexit-related headlines might also assist traders to grab some short-term opportunities.
Technical levels to watch
Currently trading around 1.2870-75 area, immediate support is pegged near the 1.2830-25 region, which if broken is likely to accelerate the slide towards testing the 1.2800-1.2790 zone. On the flip side, bulls would be eyeing for a sustained move beyond the 1.2900 handle, above which the pair might aim towards testing its next major hurdle near the 1.2975-80 region.
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