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GBP/USD Bounces Back: Fed Rate Decision Looms Large Over Next Move

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Aayush Jindal

Key Highlights

  • GBP/USD started another increase from the 1.3000 support.
  • It cleared a key bearish trend line with resistance at 1.3180 on the 4-hour chart.
  • The UK CPI could rise by 2.2% in August 2024 (YoY).
  • Today, the Fed could reduce interest rates from 5.50% to 5.25%.

GBP/USD Technical Analysis

The British Pound found support near the 1.3000 zone against the US Dollar. GBP/USD started another increase above the 1.3150 resistance zone.

Looking at the 4-hour chart, the pair climbed above the 61.8% Fib retracement level of the downward move from the 1.3239 swing high to the 1.3001 low. The pair even cleared the 100 simple moving average (red, 4-hour) and settled well above the 200 simple moving average (green, 4-hour).

Besides, it cleared a key bearish trend line with resistance at 1.3180 on the same chart. It seems like the pair is now facing hurdles near 1.3230.

A clear move above the 1.3230 zone might set the pace for a move toward 1.3265. Any more gains might call for a test of the 1.3350 zone.

On the downside, immediate support sits near the 1.3150 level and the 100 simple moving average (red, 4-hour). The next key support sits near the 1.3090 level, below which the pair could dive toward the 200 simple moving average (green, 4-hour) at 1.3000.

Looking at EUR/USD, the pair faced resistance near 1.1150 and now awaits the Fed interest rate decision for the next move.

Upcoming Economic Events:

  • UK Consumer Price Index for August 2024 (YoY) – Forecast +2.2%, versus +2.2% previous.
  • UK Core Consumer Price Index for August 2024 (YoY) – Forecast +3.5%, versus +3.3% previous.
  • Fed Interest Rate Decision - Forecast 5.25%, versus 5.50% previous.
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