GBP/USD held up at key supporting area post Yellen / FOMC outcome

Ross J Burland FXStreet

Currently, GBP/USD is trading at 1.3474, down -0.25% on the day, having posted a daily high at 1.3659 and low at 1.3452.

GBP/USD was initially two-way business in the knee-jerk reaction to the FOMC outcome, that proved to be as most participants in the markets had expected. However, once the hawkishness in the dot plot was fully digested, the December rate hike theme firmed and so did the US dollar. GBP/USD, initially buoyed by the UK's Aug retail sales +1.0% vs +0.2% f/c, July revised up from +0.3% to +0.6%, dropped significantly between a session's range of between 1.3452 and 1.3658.

However, the market was heavily short of the dollar and while the FOMC managed to appease the bulls, the balance sheet reduction is not necessarily a positive when taking into consideration subsequent price pressures and interest rate rises when considering how that will affect US stocks and US citizens; given by the moves in the benchmarks today, Wall Street knows it.

GBP/USD levels

The technical position for the pound is neutral/bearish the short-term with a potential short-term top on the 1.36 handle given the repositioning in the dollar post FOMC. Key support is seen at 1.3443/65 region, noting today's low of 1.3452. 1.3350 on the wide is next key support. On a renewed bullish play, on the wide, 1.3640/70 is a double Fibo and the 2014-2017 downtrend target.

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Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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