GBP/USD Forecast: Bullish tone strengthens above 1.5639

The GBP/USD pair rose to an intraday high of 1.5627 mainly on the back of a stronger GDP growth. The preliminary UK Q2 GDP, subject to revisions head, printed in line with the estimates at 0.7% QoQ. This was the tenth straight expansion witnessed by the UK economy. Consequently, the GBP rallied across the board. Still, the rout in the Chinese markets ensured the spot stayed below critical resistance at 1.5639 (38.2% Fib of June rally).

Focus on Fed

The Fed meeting today shall not be followed by the press conference, nor does it include the revisions to the growth or inflation forecasts. However, the Fed could put more focus on the overseas turbulence (Chinese stock market rout, falling commodity prices), while cheering the fact that Grexit fears are out of the way for now. In case the Fed puts a low emphasis on China and commodity prices, it would mean the bank is a step closer to the rate hike. Consequently, the USD could gain across the board.

Technicals – Bulls need daily close above 1.5639

The spot currently trades around 1.5610. The immediate resistance is seen at 1.5639; a level which the spot has repeatedly failed to take out on the closing basis since July 1. Fresh offers have repeatedly hit the markets above 1.5639. Meanwhile, the prices are struggling to rise above 1.5622 (76.4% Fib of 1.5670-1.5466). A failure to sustain above 1.5638, followed by a drop below 1.5622 could open doors for a sell-off to 1.5550. On the other hand, the spot could jump to 1.5673 in case it manages to sustain above 1.5600 in the early European session.

EUR/USD Analysis: Eyes 100-DMA at 1.1012 ahead of the FOMC

The EUR/USD pair fell to an intraday low of 1.1012, before profit taking helped the pair recover part of its losses to close at 1.1058. No major Eurozone economic reports were released on Tuesday, but Chinese stocks recovered losses, while the major European equity markets turned positive, thereby pushing the funding currency – EUR lower.

Greek progress ignored, focus on Fed

Greek debt talks progress continues, although EUR bulls are not impressed by the same. The ECB approved the reopening if the Greek stock market, but the news was completely ignored. Moreover, investors stay focused on the FOMC policy statement due today. A non-committal stance is expected with more emphasis on the overseas turbulence (Chinese stock markets). Markets may be in for a surprise if the Fed does not comment on overseas problems. In such a case, the EUR/USD could resume its downtrend.

Technicals – Rejected at 38.2% fib resistance

The spot ran into offers earlier today at 1.1083 (38.2% Fib R of Mar-May rally) and trades slightly below 1.1053 (61.8% Fib R of June rally). With stability in stock markets and early failure at key resistance levels, the spot could extend losses to 1.1012 (100-DMA) – 1.10 levels. On the higher side, only a daily close above 1.11 (50-DMA) could open doors for 1.1190-1.12 levels. Moreover, the spot is likely to be offered on corrective move so long as it trades below 1.1083.