GBP/USD keeps bleeding following the FOMC, eyes on 1.2922 as the early October low

The key takeaway, in a dollar bullish environment following the relief rally post US election results is that today’s Fed statement contained only two minor changes. (No press conference was held). 

Changes between the Sep 26, 2018 and Nov 8, 2018 FOMC meetings - TDS

As analysts at Nordea Research noted, the Fed is highly likely to hike its key rates again at the December meeting.

"Today’s statement contained only two changes compared with the September statement. The unemployment rate is said to have “declined” compared with “stayed low” and investment is said to have “moderated” compared with “grown strongly” since the latest meeting."

The analysts also explained that the financial market volatility was not described with more words than usual:

"Which probably means that markets will have to sell-off quite a lot for the December rate hike to be taken off the table and that the Fed can safely wait until the December meeting to discuss forward guidance beyond that point."

As per domestic events, its all still about Brexit, although data-wise, the RICS House Price Index balance (higher reported sales versus lower reported sales prices) fell to –10 in Oct, the lowest since 2012. Analysts at Scotiabank explained that Brexit worries are likely overshadowing housing activity as politicians work slowly towards the UK’s exit deal: "Reports today suggest that progress is being made but we suspect that internal tensions among senior Cabinet ministers remain. Recall that any deal agreed to between the government and Brussels still has to get through the UK parliament." 

GBPUSD levels

Sterling is making tracks back to the downside ahead of key support located down at 1.2922 (early October low). A break there opens the 1.2662 August low and then bears can look towards 1.2662. Further out, the 61.8% retracement of the move 2016-2018 and June 2017 low is at 1.2593/89. To the upside, bulls can target the top of the range at 1.3260/1.3363.