GBP/USD clings to gains around 1.3800 ahead of FOMC

GBP/USD bounces off the 1.3770 region on Wednesday.
UK’s Halifax HPI contracted 0.5% MoM in June.
US FOMC Minutes will take centre stage later in the NA session.

Pablo Piovano FXStreet

After briefly testing the 1.3780/75 band earlier in the session, GBP/USD managed to grab some buying interest and retake the key 1.3800 mark on Wednesday.

GBP/USD looks to USD, re-opening of the economy

The sterling comes under pressure on the back of the persistent bid bias surrounding the greenback. Indeed, Cable saw its earlier bullish attempt run out of steam in the 1.3840 region, sparking a subsequent move lower on the back of the dominating risk-off mood.

In the meantime, the quid looks to stabilize in the lower end of the weekly range amidst opposing views stemming from the imminent re-opening of the UK economy (on July 19^th according to PM Johnson) and the strong rebound of the Delta variant cases of the coronavirus.

In the UK docket, house prices tracked by Halifax dropped 0.5% MoM in June and rose 8.8% from a year earlier.

Across the pond, the main focus will be on the release of the FOMC Minutes of the June event.

GBP/USD levels to consider

As of writing, the pair is gaining 0.12% at 1.3808 and a breakout of 1.3898 (monthly high Jul.6) would open the door to 1.3922 (100-day SMA) and then 1.4001 (weekly high Jun.23). On the other hand, the next support emerges at 1.3731 (monthly low Jul.2) followed by 1.3653 (200-day SMA) and finally 1.3566 (monthly low Feb.4).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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