GBP/USD remains below 1.2850 after a failed recovery attempt, signaling a bearish outlook in the near term. Investors are cautious ahead of the Federal Reserve’s monetary policy announcement.
Key Points:
- GBP/USD struggles to hold above 1.2850.
- Investors await Fed’s and BoE’s policy decisions.
- US Dollar resilient on positive economic data.
The US Dollar showed strength after positive US data, while the UK’s FTSE 100 and US stock futures trade positively. Despite the risk-on sentiment, GBP/USD fails to rally.
The Fed is expected to keep rates unchanged, with a September rate cut already priced in. Investors will focus on Powell’s comments for hints on future rate cuts and economic outlook.
Technical Analysis:
GBP/USD remains below a descending trend line, with RSI indicating a bearish trend. Support levels at 1.2830, 1.2800, and 1.2780, with resistance at 1.2840 and 1.2880.
Fed FAQs:
- The Fed’s mandate is price stability and full employment.
- FOMC conducts policy meetings to make monetary decisions.
- Quantitative Easing (QE) and Quantitative Tightening (QT) are tools used by the Fed in extreme situations.
Analysis Breakdown:
The GBP/USD pair is facing resistance below 1.2850, indicating a bearish trend. The Fed’s upcoming policy decision and Powell’s comments will be crucial for future rate cut expectations. Technical analysis shows support at 1.2830 and resistance at 1.2840. Understanding the Fed’s tools like QE and QT can help grasp their impact on the US Dollar and the forex market.