GBP/USD: Perched bid on 1.31 handle leading into FOMC minutes (Eyes on EU Summit for Brexit developments)

GBP/USD is perky leading into the FOMCminutes today (top of the hour), up 0.52% on the day so far. However, the price action in the pound is more to do with the flow of dollar bids leaving the circuit with the DXY down 0.15% and sliding below the 97 handle - (despite US March CPI +1.9% vs +1.8% expected).

The dollar picked up a bid yesterday following yesterday's slide in the benchmarks and risk-off backdrop (IMF downgrades global growth forecast and E.U./U.S. tussle over trade, entering a trade spat on tariffs) -  but US stocks have stablised following and S&P has corrected higher ahead of the FOMC minutes, expecting a dovish tone. 

Eyes are on Brexit and traders are nervous to follow through with bids in the pound at this juncture while PM May seeks an extension from the EU. Here are the latest notes as we await an outcome and possible announcements later today: 

• UK's PM May addresses EU leaders, requesting article 50 extension until 30 June (Letter to European Council President Donald Tusk enclosed)
• President of the European Parliament presser: Wants greater clarity about the UK’s future relationship with the EU
• EU summit leaders comments ahead of PM May's address to EU leaders (happening now)
• Brexit: PM May refuses to say if she will resign if UK is still in EU after June 30
• GBP/USD Technical Analysis: Cable directionless amidst Brexit chaos
• Draghi speech: Brexit not expected to have much of an impact on real economy

Meanwhile, analysts at Rabobank explained, noting the mess in UK politics and parties, 

"If there were a general election both the Conservative and Labour parties would almost certainly see support weaken which would likely result in a hung parliament and possibly a Labour-led coalition government.  Given such a messy backdrop, the outlook for GBP is likely to remain clouded for a protracted period."

GBP/USD Technical Analysis:

GBP/USD Technical Analysis: Cable advancing to 3-day’s high amidst Brexit saga and ahead of FOMC