GBP/USD holds its strengths despite hawkish FOMC minutes

GBP/USD trades near 1.2740, after hitting a daily high of 1.2766 previously in the session.
FOMC minutes showed that members were deeply concerned with upside inflation risks.
GBP is holding strong after hot inflation figures from July from the UK reported during the European session.

Patricio Martín FXStreet

After the release of July’s Federal Open Market Committee (FOMC) minutes, the GBP/USD saw little change. Despite members sounding hawkish, if failed to trigger a significant reaction on the USD, the GBP continues to trade strong amid hot inflation figures from the UK and hawkish bets on the Bank of England.

Minutes showed that members were concerned with the upside inflation risks due to a hot labour market and left the door open for another hike, at least for this cycle. The immediate reaction was a slightly upwards movement of the US DXY index and the US Treasury bond yields, but the GBP/USD held its ground.

It will all come down to incoming data. Overall the US economy shows strong economic activity and a robust labour market while inflation retreats. Before the September meeting, the Federal Reserve (Fed) will receive an additional Nonfarm Payrroll and Consumer Price Index (CPI) report and medium-tier economic activity figures from August. As for now, according to the CME FedWatch tool, markets bet that the Fed will pause in September and foresee 40% odds of a 25 basis points hike in November.

GBP/USD Levels to watch

According to the daily chart, the technical outlook for the GBP/USD remains neutral to bullish as the bulls are recovering ground. With an ascending slope below its midline, the Relative Strength Index (RSI) suggests a potential increase in buying pressure, while the Moving Average Convergence (MACD) exhibits lower red bars. On the other hand, the pair is above the 20-day Simple Moving Average (SMA), below the 100-day SMA, but above the 200-day SMA, indicating that the bulls still have the upper hand looking at the broader picture.

Support levels: 1.2730, 1.2715, 1.2700.

Resistance levels: 1.2760, 1.2780, 1.2800.

GBP/USD Daily chart

GBP/USD

Overview
Today last price	1.2731
Today Daily Change	0.0027
Today Daily Change %	0.21
Today daily open	1.2704

Trends
Daily SMA20	1.2789
Daily SMA50	1.2775
Daily SMA100	1.2616
Daily SMA200	1.2362

Levels
Previous Daily High	1.2752
Previous Daily Low	1.2675
Previous Weekly High	1.2819
Previous Weekly Low	1.2666
Previous Monthly High	1.3142
Previous Monthly Low	1.2659
Daily Fibonacci 38.2%	1.2723
Daily Fibonacci 61.8%	1.2705
Daily Pivot Point S1	1.2669
Daily Pivot Point S2	1.2634
Daily Pivot Point S3	1.2592
Daily Pivot Point R1	1.2746
Daily Pivot Point R2	1.2788
Daily Pivot Point R3	1.2823

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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