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GBP/USD steady above 1.4100 after FOMC minutes

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Apr 6, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    GBP/USD moved slightly lower following the release of less dovish than expected FOMC minutes, but remained overall little changed above 1.4100 after recovering sharp losses incurred during the European session.

    FOMC minutes showed members were split on an April rate hike. While several expressed concerns that raising the target range as soon as April would signal a sense of urgency, some other believed a hike at next meeting might well be warranted if the incoming economic data remained consistent with their expectations for moderate growth in output, further strengthening of the labor market, and inflation rising to 2% over the medium term.

    At time of writing, GBP/USD is trading at 1.4120, 0.27% below its opening price, having recovered from a 1-month low of 1.4004.

    GBP/USD technical perspective

    “According to the 1 hour chart, the risk remains towards the downside as the intraday bounce was just enough to erase the extreme oversold readings reached by technical indicators, before they turned back south after testing their mid-lines. In the same chart, the price is hovering around a bearish 20 SMA, around 1.4110, all of which indicates that selling interest remains strong,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the recovery stalled below a bearish 20 SMA, currently around 1.4200, while the technical indicators present mild bullish slopes within negative territory, lacking enough momentum to confirm an upward continuation at the time being.”
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