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GBPUSD: All Eyes on Today’s FOMC

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At first glance, it looks like this GBPUSD rally has stalled.

But have buyers exhausted their resources or are market participants just hesitant in front of today’s Fed rate decision and statement?

Maybe a little of both?

I will say that major currency pairs such as GBPUSD tend to enter holding periods before significant events like that of FOMC.

That aside, here’s what we know so far…

As I mentioned on Sunday, the GBPUSD is holding above support at 1.3200 on a daily closing basis.

The level capped the late-January advance and has attracted bids so far this week.

However, the biggest takeaway from the chart below is the short-term trend line that extends from the year-to-date low.

That is a must-hold level for GBPUSD bulls in my opinion.

If it breaks down on a daily closing basis, there isn’t much to prevent the pound from revisiting the 1.2930/60 support area.

Don’t forget that I use New-York-close Forex charts so that each 24-hour session closes at 5 pm EST.

But just like I wrote in yesterday’s EURUSD post, we should have a few answers by the end of today’s session.

The Fed rate decision and statement at 2 pm EST should offer some clues about the likely future direction of GBPUSD.

Don’t forget too that there is a presser at 2:30 pm EST.

I still think the broader technicals for GBPUSD look constructive for a move higher.

That said, the immediate path forward is unclear.

The 1.3200 level is holding for now, but the bounce isn’t convincing enough for me.

I would, however, keep a close eye on trend line support from the January low.

Keeping prices above that level is critical if buyers intend to advance GBPUSD further.

If you’re looking for a U.S. dollar trade, though, you may be better off with EURUSD.

The pair is currently sitting at an inflection point that could decide the single currency’s trajectory over the next few months; perhaps even the entire year.

All eyes will be on how these markets react to today’s FOMC at 2 pm EST.

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GBPUSD trend line support on the daily time frame

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18 comments
Justin Bennett says

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Matt says

Great insight on this pair. Thank you so much Justin

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    Justin Bennett says

    You’re welcome, Matt.

    Reply
aaisha says

what do you mean by holding periods of major currency pairs

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    Justin Bennett says

    In other words, they move sideways before significant news events.

    Reply
      aaisha says

      alright got it thanku

      Reply
POLA P says

thanks

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    Justin Bennett says

    You’re welcome.

    Reply
Pierre Mifsud says

Well written as usual. I think that the 1.32 support will be broken when you consider that EURGBP looks like it is pointing north and heading to break the resistance at 0.8655 to move towards the 0.9052 target……looks like an inverse head and shoulder in the making….looks like it started moving from the head region up…..but very early at this point

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    Pierre Mifsud says

    For example the GBPCHF and GBPAUD are all pointing south…..shows GBP weakness

    Reply
      Justin Bennett says

      It shows pound weakness relative to the franc and Australian dollar. But that doesn’t suggest GBPUSD will move lower. It’s all relative.

      For the record, I am not bearish GBPUSD.

      Reply
derrick says

thanks so much sir

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    alan says

    Thanks

    Reply
      Justin Bennett says

      You’re welcome.

      Reply
    Justin Bennett says

    You’re welcome.

    Reply
OGBORO preciouslife says

Thanks man

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    Justin Bennett says

    My pleasure, as always.

    Reply
Terrence Xolani says

Thanks Justin for sending the signal in details although it has arrived late to me😀

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