Pound has pulled back
The pound had its day in the sun yesterday as the jump in UK GDP pushed it through the $1.52 mark. However, GBP/USD is still in the downward trend that has been in place since July. A lack of economic announcements from the UK today is going to leave the pound at the mercy of the greenback, and the Fed meeting tonight will be the highlight of the trading session.
The market is not expecting any change to the interest rate, and as always the language that the Fed uses will be crucial. In December, Janet Yellen stated that rates would remain unchanged for at least the next two meetings, and the US central bank is ‘patient’ when it comes to a rate rise. The US is still ahead of the UK in the race to increase interest rates and this will keep the pound under pressure.
The $1.52 level is acting as resistance and should this level be held the 200-hour moving average of $1.5111 will be in sight. If that metric is punctured $1.50 will be brought into play. If $1.52 is cleared it will then become support and the $1.5270 region will be the target.