GBP/USD hits 6-day highs after FOMC minutes, still unable to consolidate above 1.3220
|The US dollar dropped across the board after the release of the minutes from the latest FOMC meeting. GBP/USD climbed to 1.3227, reaching the highest level since October 5 but it failed to extend the rally.
At the moment of writing is trading at 1.3215, marginally above the level it had before the minutes. Momentum is still bullish but cable needs to break and consolidate on top of 1.3220 in order to open the doors to further gains. Price remains trapped in the daily range, between 1.3175 and 1.3220.
According to the minutes, many Fed officials saw another rate hike warranted this year while at the same time, were concerned about low-inflation being not transitory. Rate hike expectations for December rose marginally (they were already at high levels before the minutes - above 85% -) according to the CME Fed Watch Tool. However, odds for rate hikes next year dropped modestly. US bonds posted minor gains and pushed the greenback to the downside.
US CPI data will be released on Friday. After today’s comments from Fed’s Evans and also following the minutes, inflation readings could become more important.
FOMC Minutes: Many Fed officials saw another rate hike warranted this year
Fed’s Evans: Premature to make call on December hike - BBG TV
Technical levels
Cable holds a bullish tone and is challenging a key resistance. A clear break above 1.3220 could target 1.3285/90 (Oct 4 high). On the downside, a slide back under 1.3200 would expose the lower bound of today’s range at 1.3175; below the next support might be seen at 1.3130 (Oct 10 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.