GBPUSD is trending higher on its 1-hour time frame and moving inside an ascending channel pattern. Price is just bouncing off the top and might be due for a dip to the bottom around the 1.3970 level.
The 100 SMA is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The 200 SMA lines up with the bottom of the channel to add to its strength as a floor in the event of a dip.
Stochastic is pulling up to show that buyers have the upper hand, which suggests that the mid-channel area of interest could be enough to keep gains in check. However, the oscillator is also nearing overbought levels to reflect exhaustion.
UK CPI came in weaker than expected, with the headline figure falling from 3.0% to 2.7% versus the estimated fall to 2.8%. The core reading also missed the mark as it fell from 2.7% to 2.4% versus the 2.5% consensus.
Jobs data is due from the UK today and the claimant count could show a 3.1K drop in joblessness. The average earnings index could rise from 2.5% to 2.6% to signal potentially stronger inflation and consumer spending.
As for the US, the FOMC statement could bring in dollar volatility. A rate hike of 0.25% is widely expected, so traders will be keeping close tabs on the updated economic forecasts and dot plot of rate change projections. It will also be Powell’s first post-FOMC presser, so his views could set the tone for policy expectations in the months ahead.