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

 

 

 

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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD slides under 1.16 as US Retail Sales smash estimates

EUR/USD is trading under 1.16 after US Retail Sales smashed estimates with 0.7% in September. Treasury yields are rising. The risk-on mood continues to underpin the pair, as the ECB policymaker Wunsch dismisses inflation concerns. 

EUR/USD News

GBP/USD retreats below 1.3750 after US data

GBP/USD has pared some of its gains after US Retail Sales beat estimates, with the core group hitting 0.8% last month. Earlier, investors shrugged off dovish comments from two BOE members. 

GBP/USD News

XAU/USD slumps to $1,770 area on upbeat US data, surging US bond yields

Gold started the last day of the week on the back foot and extended its slide to a fresh daily low of $1,770 in the early trading hours of the American session pressured by the dollar's resilience and surging US Treasury bond yields.

Gold News

Crypto bulls on winning streak pushing for more

Bitcoin price favors bulls reaching $60,000 by the end of this week and onwards to new all-time highs by the end of next week. Ethereum price broke a bearish top line and could hit new all-time highs by next week in tandem with Bitcoin. 

Read more

Why is Tesla going up?

Tesla's (TSLA) stock price has finally pushed higher in a series of steady and sure moves. We had nearly given up on our bullish call with Tesla stock as it kept struggling around the $800 level.

Read more

Forex MAJORS

Cryptocurrencies

Signatures