GBP/USD finds support above 1.3080, back to 1.3130

• Cable ends Tuesday unchanged, hovering around 1.3130 ahead of FOMC and BoE.
• A retreat of the US dollar during the US session, sent GBP/USD back to 1.3130.

The GBP/USD pair followed US dollar moves on Tuesday. Earlier today peaked at 1.3172, the highest level since last Thursday and then bottomed at 1.3087. Near the end of the session it was hovering around 1.3130, at the same level it closed on Monday. The pair continues to be unable to move out of the 1.3080 key support.

On Wednesday, the Federal Reserve will announce its decision. No change in rates is expected and the meeting won’t be followed by a press conference so many analysts point out that the impact on the market could be low. Then on Thursday will be the time of the decision of the Bank of England. In the UK a rate hike is a possibility so that event will trigger volatility. Before the BoE decision, on Wednesday the July Markit Manufacturing PMI is due.

GBP/USD Technical outlook

“The pair presents a neutral stance in the short-term and according to the 4 hours chart, as its currently hovering around a bearish 20 SMA, unable to move far from it, while developing well below the 200 EMA”, says Valeria Bednarik, Chief Analyst at FXStreet.

According to her technical indicators have retreated within the positive territory now struggling with their midlines and with no directional strength. “The GBP/USD pair may continue to range ahead of BOE’s Super Thursday when Carney & Co. should decide whether or not to hike rates.”