Sterling supported after cautiouos FOMC; eyes UK GDP data

Slobodan Drvenica Windsor Brokers

GBPUSD

Cable stood on the front foot in Asia on Thursday and extended recovery from Wednesday's low at 1.2926, hitting session highs near 1.3000 barrier.
Sterling was supported by rather dovish tone from Wednesday's FOMC minutes that kept the greenback in defensive. Despite strong expectations for firmer signals about rate hike in June, Fed showed more cautious approach, although supporting gradual rate hikes, but looking for more evidence that recent economic slowdown was temporary.
Overall, the dollar may stay under pressure which was initiated by recent political turmoil in the US and softer than expected tone from Fed.
Sterling is showing signs of recovery after correction from repeated rejections above 1.3000 barrier found footstep above strong supports and first triggers at 1.2954/38, provided by rising 10/20SMA's that started to diverge.
Bullish setup of studies on daily chart is supportive but the price is still struggling to clearly penetrate thick weekly cloud that acts as strong barrier and weighs on near-term action.
However, pound is still showing negative impact from Manchester terrorist attack on Monday that may, along with politics in pre-election period, extend hesitation of broader recovery phase from 1.1950 zone.
Today's focus turns on UK Q1GDP and Business investment data which may provide fresh signals.
Forecasts for GDP are unchanged (0.3% q/q and 2.1% y/y) while Business investment is expected to rise by 0.2% in Q1, compared to -0.9% in Q4 2016.
The pair needs firm break through either of 1.2900/1.3000 boundaries for firmer direction signal.

Res: 1.3000; 1.3033; 1.3046; 1.3087
Sup: 1.2964; 1.2955; 1.2938; 1.2901

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.3079
2. R2 1.3039
3. R1 1.3007
PP 1.2967
1. S1 1.2935
2. S2 1.2895
3. S3 1.2862

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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