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FOMC React Takes GBP/USD Back to $1.4000

GBP
MNI (London)
  • Hawkish FOMC, supported by accompanying comments from Fed Powell, acted to boost the USD across the board with GBP/USD trailing EUR/USD's react to a NY low of $1.3983. This trailing of EUR/USD allowed EUR/GBP to extend its corrective pullback away from Tuesday's high of Gbp0.8628, back below its key 10-dma (current Gbp0.8590) to Gbp0.8570.
  • The USD bid tone carried over into early Asia which saw GBP/USD pressed to $1.3971 before it managed to edge back to $1.4000.
  • Support $1.3971/67($1.3967 base of the 1.0% 10-dma envelope, tends not to like to be outside this parameter for long) ahead of $1.3959(50% 1.3669-1.4248). A break of $1.3950 to expose $1.3920/00. Resistance now seen between $1.4035/50.
  • Data light session for UK. Focus on continued fallout from the FOMC. US Weekly Jobless Claims the main data interest.
  • MNI Techs: GBPUSD weakness accelerated Wednesday, with prices breaking below key support at the 50-day EMA. The move through the average strengthens a short-term bearish outlook and scope is seen for a deeper corrective pullback. Attention turns to the 100-dma at 1.3935 next. For bulls, a climb above 1.4133, yesterday's high is required to ease the current bearish pressure. Key trend resistance is at 1.4248, Jun 1 high.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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