GBP/USD remains in tight trading range above 1.28

Eren Sengezer FXStreet

The GBP/USD pair moves sideways on Wednesday in a narrow 40-pip channel amid a lack of fresh fundamental drivers. In fact, since last Wednesday's snap election announcement in the UK, the pair has been directionless despite the increasing market volatility following the French first round election result. At the moment, the pair is trading at 1.2820, down 0.15% on the day.

A recent announcement from U.S. Treasury Secretary Steven Mnuchin revealed that Trump's new tax plan would include a 15% cut to businesses. The market reaction to the announcement has been mixed as the US Dollar Index struggled to gather enough strength to make a decisive break above the 99 mark. As of writing, the index was up 0.26% on the day, at 98.98.

US Treasury's Mnuchin confirms that business tax will be 15% in Trump tax reform plan - Reuters

The 10-year U.S. Treasury Bond yield gave back its daily gains after touching the 2.35% level at the opening hour and is making it tough for the greenback to add to its bullish momentum. There are no macro data scheduled for the rest of the day and the pair's price action could be driven by the US Dollar Index.

Technical outlook

The immediate resistance for the pair could be seen at 1.2875 (Apr. 18 high) ahead of 1.2900 (psychological level) and 1.2950 (Oct. 3 high). To the downside, supports are located at 1.2760 (Apr. 21 low), 1.2700 (psychological level) and 1.2615 (Mar. 27 high).

GBP/USD: Downtrend now appears mature - Westpac

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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