GBP/USD Supported Above Triple Bottom $1.1360 – Eyes on US FOMC & Fed
Skerdian Meta • 2 min read
In the Asian session, the GBP/USD pair is lingering around the crucial support level of 1.1360. The asset is projected to plummet after falling below the aforementioned support, owing to forecasts of a growing Federal Reserve (Fed)-Bank of England (BOE) policy divergence.
The Fed’s scheduled monetary policy meeting on Wednesday is expected to end with a third consecutive 75 basis point (bps) rate hike or to a greater amount, as well as harsh guidance on a gloomy growth forecast. Price pressures have failed to show major fatigue symptoms, despite higher-than-expected August inflation print readings for both the headline and core Consumer Price Index (CPI). As a result, the Fed has no choice but to accelerate the pace of interest rate hikes.
There is no disputing that the Bank of England will raise interest rates at its monetary policy meeting on Thursday. Households in the United Kingdom are likewise enduring the effects of mandatory inflated payouts. Growth prospects and labor market conditions do not favor policy tightening.
Despite this, BOE Governor Andrew Bailey is expected to swallow the bitter pill and announce a 50 basis point rate hike. The assumption that the Fed will raise interest rates more aggressively is bolstering the greenback bulls.
The UK economy will also release the S&P Global PMI this week. The Manufacturing and Services PMIs are both at 47.5 and 50. On the PMI front, the UK economy is likely to fare middling.
GBP/USD Technical Outlook
The GBP/USD pair continues to trade bearish near the triple bottom support area of $1.1360. GBP/USD has already given up most of the gains it made during the European and US sessions and now trades near $1.1374, reinforcing predictions of a continuation of the bearish trend in the coming period. The downward trend is backed by the negative pressure produced by the EMA50, with our next primary goal of 1.1300 in sight.
Breaking 1.1360 will make it easier to reach the indicated target, but remember that the continuation of the bearish wave is dependent on price stabilization below 1.1460. Today’s trading range is likely to be between 1.1280 support and 1.1450 resistance.
Today’s projected trend: Bearish