GBP/USD back into 1.31 ahead of the US Fed's rate call as BoE Thursday looms

The GBP has gone flat for the week, ahead of key releases from both the US Fed and the UK's BoE.
With thin data on the docket for Wednesday's London markets, the FOMC rate call could see some movement later in the day.

Joshua Gibson FXStreet

The GBP/USD pair is back on the soft side for this week, trading back into the 1.3100 major level after peaking near 1.3175. The Sterling was unable to hold onto gains from the early week, and heads into Wednesday near where it started on Monday.

Sterling traders are looking towards Thursday's Bank of England (BoE) showing, where an anticipated rate hike from the UK's central bank is beginning to look less likely after economic data for the UK economy continues to come out on the disappointing side, while today will be seeing the Markit Manufacturing PMI at 08:30 GMT, forecast to tick lower, from 54.4 to 54.2.

Before Thursday's BoE showing, the upcoming US session for Wednesday will be dropping a FOMC Policy Statement and Fed rate decision, leaving broader market bias firmly in the hands of Greenback traders once again, though expectations for a rate hike are on the low side as market participants are calling for a rate hike to follow in August.

GBP/USD Levels to watch

The Sterling-Dollar pair9ing has flattened out ahead of the BoE's 'Super Thursday' event, and with a US Fed outing on the books for Wednesday, directional movement for the GBP/USD remains muted, as noted by FXStreet's own Valeria Bednarik: "the pair presents a neutral stance in the short-term and according to the 4 hours chart, as its currently hovering around a bearish 20 SMA, unable to move far from it, while developing well below the 200 EMA. Technical indicators have retreated within positive territory now struggling with their midlines and with no directional strength. The GBP/USD pair may continue to range ahead of BOE's Super Thursday when Carney & Co. should decide whether or not to hike rates."

Support levels: 1.3090 1.3045 1.3010

Resistance levels: 1.3150 1.3190 1.3230

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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