Search ForexCrunch
  • UK PM May repeats that a no deal is better than a bad deal.
  • CB Consumer Confidence Index improves in September.
  • US Dollar Index stays in red ahead of tomorrow’s FOMC meeting.

After spending the Asian session in a tight range near the 1.31 mark, the GBP/USD pair gained traction during the European morning and advanced to a fresh session high of 1.3176 before going into a consolidation phase. As of writing, the pair was up 0.32% on the day at 1.3160.

British Prime Minister Theresa May delivered her latest comments on Brexit talks in the last hour and repeated that a no Brexit deal would be better than a bad deal and explained that  any deal that breaks up the integrity of the UK would be considered a bad deal. Commenting on the opposition Labour Party’s call for a second referendum, May argued that their policy was not in their national interest. With none of these remarks offering anything new, the GBP/USD pair didn’t show a notable reaction.

Meanwhile, investors largely ignored today’s data releases from the United States as they remain focused on tomorrow’s FOMC meeting. The monthly report published by the Consumer Board showed that the Consumer Confidence Index improved to 128.4 in September to beat analysts’ estimate of 132.1. Earlier in the day, the FHFA announced that house prices rose 0.2% on a monthly basis  in July following June’s 0.3% growth.

Previewing tomorrow’s FOMC event, “any drift higher in the dots or talk of a need to hike above neutral are where the potential hawkish risks lie. However, given the recent USD strength throughout the summer and current speculative positioning, a dovish surprise should induce a larger market reaction relative to a hawkish one,” TD Securities wrote in a recently published report.

Technical levels to consider

The initial support for the pair could be seen at 1.3090 (100-DMA) ahead of 1.3040 (20-DMA) and 1.3000 (psychological level). On the upside, resistances are located at 1.3175 (daily high), 1.3215 (Sep. 19 high) and 1.3275 (Sep. 21 high).