|

GBP/USD eases off highs as investors await FOMC meeting

After rising above the 1.36 mark during the European session, the GBP/USD pair went into a consolidation phase as investors started to take their profits off the table ahead of the critical FOMC meeting. As of writing, the pair was trading at 1.3550, still up 0.35% on the day.

Earlier in the day, the data from the UK revealed that retail sales increased by 1% on a monthly basis in August, lifting the annual change to +2.4%. Moreover, July's data was revised up to 0.6% from 0.3%. Fueled by the upbeat data, the GBP gathered strength against its peers.The GBP/USD pair jumped to a fresh daily high at 1.3603 while the EUR/GBP pair lost more than 50 pips in a quick manner.

However, investors are looking to step away from the markets before the FOMC announces its monetary policy decisions and publishes the updated economic projections report and its infamous 'dot plot' chart.Chairwoman Yellen will also be giving a press conference at which she will be responding to questions from the media. 

"We expect the statement and press conference to contain only minor changes in language about the path of short-term rates. That is, we do not expect the statement or the press conference to be hawkish or dovish about a possible hike in December. Instead, over the next several months until the December meeting, we expect more vocal debates over the causes of weaker-than-expected-inflation and the role that financial conditions should play in policy decisions," Nomura analysts wrote in a recent report.

Technical outlook

With today's upsurge, the RSI indicator on the daily graph rose back to the oversold territory above the 70 handle, suggesting that the pair could have a difficult time extending its gains. 1.3500 (psychological level) remains as a critical support for the pair ahead of 1.3380 (Sep. 15 low) and 1.3180 (Sep. 14 low). On the upside, resistances could be seen at 1.3615 (Sep. 15 high), 1.3660 (Jun. 24/Brexit referendum closing level) and 1.3700 (psychological level). 

Author

Eren Sengezer

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

More from Eren Sengezer
Share:

Editor's Picks

EUR/USD edges lower below 1.1650 as Middle East tensions fuel US Dollar strength

The EUR/USD pair trades in negative territory around 1.1635 during the early Asian session on Thursday. The US Dollar strengthens against the Euro as escalating Middle East conflict boosts safe-haven flows. Traders brace for the Eurozone Retail Sales and US weekly Initial Jobless Claims reports, which will be released later on Thursday. 

GBP/USD tests key moving averages as growth downgrade weighs

GBP/USD was nearly flat on Wednesday, edging up 0.08% to settle around 1.3370 in a quiet session. The pair has fallen sharply from its late-January high near 1.3870 and is now testing the 200-day Exponential Moving Average, with this week's one-week forex heatmap showing Pound Sterling as one of the worst performers against the US Dollar, down about 1.4% on the week.

Gold re-attempts $5,200 amid a softer USD; reduced Fed rate cut bets cap gains

Gold bounces toward $5,200 for the second consecutive day on Thursday amid a modest US Dollar weakness. Wednesday's upbeat US macro data further tempered hopes for three rate cuts by the Fed in 2026. Furthermore, escalating Middle East tensions might continue to benefit the USD's status as the global reserve currency and contribute to capping the bullion.

Ethereum jumps alongside a spike in open interest, realized price could limit upside

Ethereum has jumped above $2,100 on Wednesday, following a general recovery across the crypto market. The move was accompanied by a spike in Ethereum's open interest, which has increased to 13.43M ETH — its highest level since January 31. 

First Venezuela, now Iran: The US-China energy war escalates

At first glance, the latest escalation involving the United States with both Iran and Venezuela looks like another chapter in a long-running geopolitical story. But viewed through a broader strategic lens, something else may be unfolding: Energy.

Bittensor extends recovery despite retail demand slump

Bittensor, a leading Artificial Intelligence token, is aging up above $190 at the time of writing on Wednesday. Steady price increases characterise the broader crypto market, with Bitcoin holding above $71,000 and Ethereum above $2,000.