GBP/USD is holding ground following the Fed announcements


  • Fed on hold for foreseeable future, but monitoring "incoming data including Global developments in muted inflation pressures."
  • GBP/USD vulnerable to key support structure ahead of crucial PMI.
  • Powell is not comfortable with inflation persistently below 2%. 

GBP/USD has been holding within a range of between 1.2989 and 1.3029, slightly higher on the US session following the Federal Reserve's announcements whereby the central bank is on hold, albeit watchful of "incoming data including Global developments in muted inflation pressures." 

Powell is now speaking and he has said that he is not comfortable with inflation persistently below 2% – that's dovish. 

FOMC keeps rates unchanged

  • Target rate remains at 1.5% to 1.75%.
  • Interest rate on excess reserves 1.6% versus 1.55%.
  • The decision is unanimous.
  • Fed says labor market stronger, economy rising at moderate rate.
  • Consumption moderate, investment and exports week.
  • Job gains solid, unemployment has remained a low.
  • Overall and core inflation running below 2%.
  • Fed leaves discount rate at 2.25%.
  • Market-based gauges of inflation compensation remain low.
  • Aims for inflation returning to symmetric 2% goal.
  • Reiterates plan to buy treasury bills into 2nd half of 2020.
  • Continue to conducting Terman overnight repo operations at least through April.
  • Survey based inflation expectations a little changed.
  • Current policy appropriate to sustain expansion.
  • Will continue to monitor incoming data including Global developments in muted inflation pressures.

There was a dovish tilt to the meeting and announcements within the statement, but there really isn't that much change to it.

Changes to statement

BoE on hold? A lot depends on the PMIs

Meanwhile, this Friday, we will have PMI data. This will be critical ahead of the Bank of England meeting tomorrow. Both Monetary Policy Members, Tenreyro and Vlieghe, have joined the choir of members signing a dovish tune of late and who have been very specific about these forthcoming reports.

On the PMI front, should the surveys rebound, it has been made clear with a great deal of emphasis on the data, that the Bank of England could well hold-off. A rate cut following a rebound in the Composite reading would be peculiar. 

GBP/USD levels

Bulls have lost their mojo on the charts and have taken a trip to the downside below a 23.6% Fibo retracement of the October rally. Bears are back in control on the pursuit of a 38.2% Fibo towards 1.2918 and a key support structure.

GBP/USD

Overview
Today last price 1.3022
Today Daily Change 0.0002
Today Daily Change % 0.02
Today daily open 1.302
 
Trends
Daily SMA20 1.3078
Daily SMA50 1.306
Daily SMA100 1.2853
Daily SMA200 1.2693
 
Levels
Previous Daily High 1.3066
Previous Daily Low 1.2974
Previous Weekly High 1.3175
Previous Weekly Low 1.2962
Previous Monthly High 1.3515
Previous Monthly Low 1.2896
Daily Fibonacci 38.2% 1.3009
Daily Fibonacci 61.8% 1.3031
Daily Pivot Point S1 1.2974
Daily Pivot Point S2 1.2928
Daily Pivot Point S3 1.2882
Daily Pivot Point R1 1.3066
Daily Pivot Point R2 1.3112
Daily Pivot Point R3 1.3158

 

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD flat lines above mid-0.6700s ahead of Australian jobs data

AUD/USD flat lines above mid-0.6700s ahead of Australian jobs data

AUD/USD attracts some dip-buyers on Thursday, around the 0.6820 region. Against the backdrop of the RBA's hawkish stance, the upbeat market mood acts as a tailwind for the pair. That said, persistent concerns over an economic slowdown in China, along with a modest USD uptick, cap the upside as traders await Australian employment figures.

AUD/USD News
USD.JPY jumps above 143.50, focus shifts to BoJ rate decision

USD.JPY jumps above 143.50, focus shifts to BoJ rate decision

The USD/JPY pair gains traction around 143.55 on Thursday during the early European session. The uptick of the major pair is bolstered by the recovery of the US Dollar. Investors will shift their attention to the Bank of Japan interest rate decision on Friday. 

USD/JPY News
Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price oscillates in a range on Thursday and consolidates the previous day's post-FOMC rejection slide from the $2,600 mark or a fresh record high. Persistent geopolitical risks, along with signs of economic trouble in the US and China, lend support to the safe-haven metal.

Gold News
Ethereum attempts recovery following first rate cut in four years

Ethereum attempts recovery following first rate cut in four years

Ethereum is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds recorded $15.1 million in outflows.

Read more
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Forex MAJORS

Cryptocurrencies

Signatures