The Federal Reserve has decided to keep rates unchanged and justified their decision by referring to the strong labor market and high inflation levels. The currency pair GBPUSD is currently trading at 1.26376.
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- Federal Reserve maintains rates, citing robust labor market and elevated inflation levels.
The pair currently trades last at 1.26376.
The previous day high was 1.2625 while the previous day low was 1.2508. The daily 38.2% Fib levels comes at 1.258, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2553, expected to provide support.
GBP/USD dropped after the US Federal Reserve (Fed) held rates unchanged, in a buy-the-rumor, sell-the-fact reaction, as the GBP/USD is set to erase some of its earlier gains, which saw the GBP/USD reaching a new year-to-date (YTD) high at 1.2698. At the time of writing, the GBP/USD is trading volatile at around the 1.2690/1.2640 area as traders brace for Jerome Powell’s press conference.
In its monetary policy statement, the Federal Reserve said the labor market remains robust, with the unemployment rate low and inflation remains elevated. Furthermore, tighter conditions are likely to weigh on economic activity; therefore, according to the statement, policymakers decided to keep rates unchanged, which will “allow the Committee to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”
Regarding the dot-plot, revealed in the Summary of Economic Projections (SEP), officials revised upwardly, with most expecting the Federal Funds Rate (FFR) to hit 5.6% this year. Hence, Jerome Powell and Co. are evaluating 50 bps of additional rate hikes, up from the 5.10% projections in March.
Federal Reserve officials projected growth at 1% in 2023, up from 0.4% in March, and the Unemployment rate was downward revised from 4.5% to 4.1%. The Fed’s preferred gauge for inflation, the Core PCE, is estimated at 3.9% compared to March 3.6%, while general PCE is estimated at 3.2% from 3.3%.
The GBP/USD edged from 1.2680 and cracked the R1 daily pivot, as it hit 1.2626, before stabilizing around the current exchange rate at around 1.2640. Should be said that it fell shy of breaking below Tuesday’s high, at 1.2624, seen as the next support before tumbling to 1.2600.
Technical Levels: Supports and Resistances
GBPUSD currently trading at 1.2645 at the time of writing. Pair opened at 1.2612 and is trading with a change of 0.26 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.2645 |
| 1 | Today Daily Change | 0.0033 |
| 2 | Today Daily Change % | 0.2600 |
| 3 | Today daily open | 1.2612 |
The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2448, 50 SMA 1.2473, 100 SMA @ 1.2313 and 200 SMA @ 1.2027.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.2448 |
| 1 | Daily SMA50 | 1.2473 |
| 2 | Daily SMA100 | 1.2313 |
| 3 | Daily SMA200 | 1.2027 |
The previous day high was 1.2625 while the previous day low was 1.2508. The daily 38.2% Fib levels comes at 1.258, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2553, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 1.2538, 1.2465, 1.2421
- Pivot resistance is noted at 1.2655, 1.2698, 1.2772
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.2625 |
| Previous Daily Low | 1.2508 |
| Previous Weekly High | 1.2590 |
| Previous Weekly Low | 1.2369 |
| Previous Monthly High | 1.2680 |
| Previous Monthly Low | 1.2308 |
| Daily Fibonacci 38.2% | 1.2580 |
| Daily Fibonacci 61.8% | 1.2553 |
| Daily Pivot Point S1 | 1.2538 |
| Daily Pivot Point S2 | 1.2465 |
| Daily Pivot Point S3 | 1.2421 |
| Daily Pivot Point R1 | 1.2655 |
| Daily Pivot Point R2 | 1.2698 |
| Daily Pivot Point R3 | 1.2772 |
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