GBP/USD advances above 1.2970 as focus shifts to FOMC meeting


  • GBP/USD is rising for third straight day on Wednesday.
  • Annual Core CPI in August declined to 0.9% in the UK.
  • US Dollar Index posts modest losses below 93.00 ahead of the FOMC event.

The GBP/USD pair preserved its bullish momentum during the European session on Wednesday and rose to its highest level in nearly a week at 1.2973. As of writing, the pair was up 0.65% on the day at 1.2970.

Earlier in the day, the data published by the UK's Office for National Statistics showed that the annual inflation, as measured by the Core Consumer Price Index (CPI), slumped to 0.9% in August from 1.8% in July. However, this reading came in higher than the market expectation of 0.6%.

Eyes on Brexit, FOMC's September meeting

Meanwhile, latest Brexit headlines seem to be helping the British pound stay resilient against its rivals.

Commenting on the latest political developments, "PM Boris Johnson has been seeking to soothe concerns about the controversial Internal Markets bill that passed the first hurdle in parliament, said FXStreet analyst Yohay Elam. "Several members of the PM's ruling Conservative Party have either abstained or voted down the legislation – and others were expected to follow. If the final wording refrains from breaking international law, the pound could extend its gains.”

On the other hand, the broad-based USD weakness is also providing a boost to GBP/USD. The US Dollar Index, which closed virtually unchanged on Tuesday, was last seen losing 0.25% on the day at 0.24%.

Following the Federal Reserve's announcement of a policy shift to average inflation targeting, investors don't expect the FOMC meeting to yield a surprising outcome. Nevertheless, the Fed's updated Economic Projections and FOMC Chairman Jerome Powell's press conference will be watched closely by the market participants. 

Technical levels to watch for

GBP/USD

Overview
Today last price 1.296
Today Daily Change 0.0071
Today Daily Change % 0.55
Today daily open 1.2889
 
Trends
Daily SMA20 1.3126
Daily SMA50 1.2979
Daily SMA100 1.2703
Daily SMA200 1.2734
 
Levels
Previous Daily High 1.2926
Previous Daily Low 1.2815
Previous Weekly High 1.3279
Previous Weekly Low 1.2763
Previous Monthly High 1.3396
Previous Monthly Low 1.2982
Daily Fibonacci 38.2% 1.2884
Daily Fibonacci 61.8% 1.2858
Daily Pivot Point S1 1.2827
Daily Pivot Point S2 1.2765
Daily Pivot Point S3 1.2716
Daily Pivot Point R1 1.2939
Daily Pivot Point R2 1.2988
Daily Pivot Point R3 1.305

 

 

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