GBP/USD backs off from highs due to higher market volatility, Fed emergency cut
GBP/USD is trading at 1.2826 at the time of writing, up some 0.6% having climbed from a low of 1.2739 to a high of 1.2843 following today's emergency 50 basis point cut from the Federal Reserve. In an emergency meeting, the Fed cut interest rates and left the door wide open for more at the 18th March meeting, sending the DXY to fresh daily lows of 96.98. Fed's chair, Jerome Powell, said at the start of the press conference that the "outbreak has prompted significant moves in financial markets." Powell added, "In the weeks and months ahead we will continue to closely monitor developments and will act appropriately to support the economy."
GBP/USD Analysis: Remains above 1.2750
Yesterday, the GBP/USD exchange rate tried to decline below 1.2750. During Tuesday morning, the rate was testing the given level.
Note that the currency pair is pressured by the 55-hour SMA near 1.2800. Thus, some downside potential could prevail in the market. A possible downside target is the weekly S1 at 1.2692.
However, if the 1.2750 level holds, it is likely that the British Pound could continue to consolidate against the Greenback in the short term. If bulls prevail in the market, the rate could re-test the resistance formed by the 100-hour SMA and the weekly PP at 1.2856.
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