- S Dollar Index fluctuates in the upper half of the daily range.
- Investors turn their attention to FOMC announcements.
- UK PM May repeats that they are not looking for a partial membership of the single market.
The GBP/USD pair spiked to a daily high of 1.3197 right around the London close and quickly erased its gains. As of writing, the pair was virtually unchanged on the day at 1.3178.
Earlier today, citing an internal document, Bloomberg reported that the EU wanted to step up the “no-deal Brexit” plans as they were worried about the uncertainty in the UK over the Brexit talks. Following this report, the pound sterling weakened against its rivals but was able to limit its losses as investors started to move to the sidelines ahead of the critical FOMC meeting.
Previewing today’s FOMC event, “the much bigger focus will be on to what extent the recent hawkish shift among FOMC doves – evident in recent public commentary – will translate to projections for more rate hikes over the coming years. While we expect the ‘dots’ for 2018, 2019 and 2020 to shift upward, we believe this upward shift will be concentrated among doves rather than hawks, and this should keep the all-important median projections unchanged,” Bill Diviney, Senior Economist at ABN AMRO, said.
Meanwhile, today’s only data from the UK revealed that mortgage lending for the total market in August fell by 1.2% on a yearly basis to £24.1 billion. Commenting on the data, “remortgaging continued to dominate in August, as homeowners took advantage of a competitive market to lock into attractive deals, Peter Tyler, Director, UK Finance, said.
On the other hand, the US Dollar Index, which advanced to a daily high of 94.40 earlier in the NA session, is now consolidating in the positive territory. The data from the U.S. on Wednesday showed that new home sales increased by 629K in August to fall a little short of the market expectation of 630K. At the moment, the DXY is adding 0.15% on the day at 94.28.
Technical levels to consider
The pair could face the immediate resistance at 1.3200 (psychological level/daily high) ahead of 1.3275 (Sep. 21 high) and 1.3360 (Jul. 9 low). On the downside, supports could be seen at 1.3140 (daily low), 1.3090 (100-DMA) and 1.3000 (psychological level).
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