GBPUSD had been consolidating between support around the 1.4050 minor psychological level and resistance at the 1.4450 mark before it made an upside breakout. This suggests that an uptrend might take place but the pair looks ready for a pullback for now.
Using the Fib tool on the latest swing low and high on the 4-hour time frame shows that the 38.2% retracement level coincides with the previous resistance. The 100 SMA is starting to make an upward crossover from the 200 SMA to indicate that the path of least resistance is to the upside.
However, stochastic is still on the move down so sellers are in control at the moment. Similarly RSI is heading south so a correction from the breakout rally is in play.
The FOMC decided to keep interest rates on hold as expected but refrained from sharing any hints on whether they’d hike in June or not. In addition, they downgraded their growth and inflation assessment, taking the recent disappointing figures into account.
As for the pound, the currency appears to be bottoming out now that Brexit concerns are fading. Even though the opinion polls are still showing a split vote, anti-Brexit remarks from top officials might be enough to convince the majority to vote for staying in the EU.
Data from the UK came in line with expectations, as the preliminary GDP reading showed a 0.4% expansion, slower than the previous 0.6% growth figure. There are no major reports lined up from the UK today but the US is set to print its advanced GDP report. Analysts are expecting to see a 0.7% expansion, much slower than the previous 1.4% figure.
To contact the reporter of the story: Samuel Rae at email@example.com
For free forex trade signals, sign up on Trade24 here