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  • Cable sees fresh selling on mild risk-aversion, USD bid
  • Fed decision UK’s Labour Party conference – key event risks ahead

Having witnessed a brief consolidative phase around 1.3180 in Asia, the GBP/USD pair came under fresh selling pressure and extended its corrective slide to the midpoint of the 1.31 handle.

The higher-yielding pound was sold-off into a renewed risk-aversion that gripped Europe, reflected by negative European equities, as market turn cautious ahead of the key FOMC decision due to be announced later on at 1800 GMT. Any hawkish tone delivered by the Fed, with regard to the interest rates outlook next year, could trigger an extensive USD rally across the board, which could knock down the Cable to 1.3050 levels.

Further, the GBP bulls remain on the back foot, as markets digest the latest comments from the UK PM May, as she reiterated that a No deal is better than a bad Brexit deal. Also, developments from the UK’s Labor Party Conference, favoring the second referendum on Brexit, continues to cap any upside attempts in the spot.

Looking ahead, the pair will take cues from the broader market sentiment and UK realized sales data until the announcement of the FOMC rate decision.

GBP/USD Technical Levels

FXStreet’s Analyst Haresh Menghani, noted: “Any meaningful retracement is likely to find immediate support near the 1.3140-35 region and is followed by the 1.3100 handle, below which the pair seems to head back towards challenging the 1.3050 support area (50% Fibonacci retracement level). Alternatively, a sustained move back above the 1.3200 handle, leading to gains beyond the 1.3215-20 region might negate any negative bias and assist the pair to make a fresh attempt towards conquering the 1.3200 round figure mark.”