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  • The FOMC’s minutes and the UK’s inflation should give GBP/USD its next directional move.
  • GBP/USD established a fresh 2018 low at 1.3390 on Monday and is now consolidating above the level.

The GBP/USD currency pair is trading at around 1.3442 up 0.14% on Tuesday.  

GBP/USD found an intraday ceiling 1.3490 in Early Europe ahead of the UK’s Inflation Report Hearings then the Cable retreated to the 1.3425 region which was also the Asian range.  

Investors are starting to focus on the FOMC’s minutes and the UK inflation data on Wednesday as in early Europe, the Consumer Price Index, the Retail Sales Index and the Producer Price Index for April will likely provide  GBP/USD with much volatility as the Bank of England (BoE) recently said that it was data-dependant. Later in the day, investors will closely watch the FOMC’s minutes  for any growth and inflation clues. It is scheduled at 18:00 GMT on Wednesday

In fact, earlier in the day BoE’s Governor Mark Carney testified on the inflation and economic outlook before the Parliament’s Treasury Select Committee (TSC). It was widely expected that he would make dovish and cautious comments. Indeed, he said that “it is right to wait for more data “ and that “households, businesses understand that rates are likely to rise at a gentle pace,” therefore signaling that the BoE is data-dependant for further rates hikes and it will closely watch any inflation data.  

The US Dollar Index (DXY) is trading mixed on Tuesday and is virtually unchanged. However, the bull trend remains strong as the greenback is trading at multi-week’s highs.  

GBP/USD 4-hour chart  

The main trend is bearish as the market is trading below its 50, 100 and 200-period simple moving averages on the 4-hour chart. Supports are seen at the 1.3400 handle and at the 1.3350 figure while resistances are priced in at the 1.3450 and 1.3500 previous swing levels and at 1.3618 cyclical high.