• GBP/USD lacked any firm directional bias and oscillated in a range below the 1.3500 mark.
  • The UK political turmoil acted as a headwind and capped gains amid modest USD strength.
  • The downside remains limited as investors seemed reluctant ahead of the FOMC decision.

The GBP/USD pair seesawed between tepid gains/minor losses through the first half of the European session and remained confined in a range below the key 1.3500 psychological mark.

A combination of negative factors failed to assist the GBP/USD pair to gain any traction or capitalize on the overnight recovery move from a three-week low, around the 1.3440 region. Growing demand for UK Prime Minister Boris Johnson's resignation over a series of lockdown parties in Downing Street acted as a headwind for the British pound. Apart from this, modest US dollar strength capped upside for the major.

The USD held steady near a two-week high and continued drawing support from expectations that the Fed will tighten its monetary policy at a faster pace than expected. In fact, the markets seem convinced about an eventual Fed lift-off in March and have been pricing in a total of four rate hikes in 2022. Apart from this, a goodish rebound in US Treasury bond yields turned out to be another factor that underpinned the buck.

That said, a generally positive tone around the European equity markets held back traders from placing aggressive bullish bets around the safe-haven greenback. This, along with rising bets for additional interest rate hikes by the Bank of England, helped limit any deeper losses for the GBP/USD pair. Investors also seemed reluctant and preferred to wait for the outcome of a two-day FOMC monetary policy meeting.

In the absence of any major market-moving economic data from the UK, investors might wait for a fresh catalyst before positioning for a firm intraday direction. Later during the early North American session, traders might take cues from the release of the Conference Board's US Consumer Confidence Index. The data will influence the USD price dynamics and provide some short-term trading impetus to the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3494
Today Daily Change 0.0007
Today Daily Change % 0.05
Today daily open 1.3487
 
Trends
Daily SMA20 1.357
Daily SMA50 1.3421
Daily SMA100 1.354
Daily SMA200 1.373
 
Levels
Previous Daily High 1.3566
Previous Daily Low 1.344
Previous Weekly High 1.369
Previous Weekly Low 1.3546
Previous Monthly High 1.355
Previous Monthly Low 1.3161
Daily Fibonacci 38.2% 1.3488
Daily Fibonacci 61.8% 1.3518
Daily Pivot Point S1 1.343
Daily Pivot Point S2 1.3372
Daily Pivot Point S3 1.3304
Daily Pivot Point R1 1.3555
Daily Pivot Point R2 1.3623
Daily Pivot Point R3 1.368

 

 

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