GBP/USD drops from weekly highs near 1.3980 post-FOMC and Brexit final call


  • GBP/USD rose sharply after the FOMC decision, however, it lacked strength near 1.3980.

  • The GBP took a breather after getting a final OK from the EU over Brexit.

  • Risk-prone investors are likely to give support to cable.

The GBP/USD pair maintains its strength from Wednesday lows near 1.3850 and accumulates a move above 100 pips posting its strong gains in the past few sessions. The pair refreshed its weekly high near 1.3980, although the pair seems to find it difficult to sustain above the mentioned level.

At the time of writing, the GBP/USD pair is trading 1.3956, up 0.18% on the day.

The pair gains at the expense of the US dollar index (DXY), which tracks the movement of the greenback against its counterpart. The index lost its ground on Wednesday and fell to multi-week lows below 90.55, thus exerting pressure on the pair. The move was exclusively sponsored by the unchanged and widely anticipated tone of the US central bank approach on its current accommodative monetary policy with the Fed maintained status-quo on short term interest rates and a bond-buying program. Fed Chair Jerone Powell's comments came just before US President Joe Biden’s first speech to Congress on the unveiling of a sweeping package for families and education. Investors already discounted the decision and, thus, remained unfazed largely by the announcement.

On the other hand, the sterling benefits from better economic recovery prospects after the pick up in covid vaccine roll-out programme overcoming some initial hiccups in the supply of the essential vaccine. Moving on,  the optimism around the Brexit deal, after the EU Parliament voted by a large majority to give the final approval to the Brexit deal amid chaos, complaints and a court challenge, lifted the sentiment around sterling. As per the tally total of  660 votes in favour, with five against and 32 abstentions. 

As said, the gains were seemed limited after Arlene Foster,  the leader of Northern Ireland faces a party nauseated over the Brexit fallout, followed by the Scottish election on May 6 that holds risk for the pound against the dollar and euro.

As for now, investors await the US advance Q1 GDP release and the Price Index on a quarterly basis for fresh trading impetus.

GBP/USD additional levels

GBP/USD 

Overview
Today last price 1.3945
Today Daily Change 0.0007
Today Daily Change % 0.05
Today daily open 1.3938
 
Trends
Daily SMA20 1.3838
Daily SMA50 1.3876
Daily SMA100 1.3749
Daily SMA200 1.3416
 
Levels
Previous Daily High 1.3951
Previous Daily Low 1.3861
Previous Weekly High 1.4009
Previous Weekly Low 1.381
Previous Monthly High 1.4017
Previous Monthly Low 1.3671
Daily Fibonacci 38.2% 1.3917
Daily Fibonacci 61.8% 1.3895
Daily Pivot Point S1 1.3882
Daily Pivot Point S2 1.3827
Daily Pivot Point S3 1.3792
Daily Pivot Point R1 1.3972
Daily Pivot Point R2 1.4006
Daily Pivot Point R3 1.4062

 

 

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