PRE FOMC Analysis: GBP/USD Is Close To Support

Nenad Kerkez

The mainĀ eventĀ this month is FOMC Economic projection with statement and Federal Funds Rate decision. Market expects a hike of 0.25 % (from 0.50% to 0.75%). Any deviation from expected result will move the USD heavily. Today’s GBP data was better than expected with Average Earnings Index coming +0.2 % better than expected while the change in the number of people claiming unemployment-related benefits during the previous month dropped to 2.4k.

GBP/USD is currently at support and bullish POC zone comes within 1.2628-48 (neckline support, L3, 61.8, trend line) and the bounce from there could target 1.2696 and 1.2730. The problem for bulls is head and shoulders pattern and in the case of a drop watch for 1.2615. Break below should target 1.2584 and 1.2560. Volatility is not high now, but it could spike during London profit taking and when NY traders join up.

GBPUSD Hourly Chart

GBPUSD Hourly Chart