GBP/USD has climbed above both trendline resistance and its 200-day moving average but will likely pause this session ahead of the Federal Open Market Committee‘s decision on US monetary policy at 1900 UK time and the Fed’s press conference half an hour later.
If the Fed, as expected, announces no significant policy changes, GBP/USD will have to top more resistance around the 1.3910 level if it is to progress further.
GBP/USD ON HOLD PRE-FED
GBP/USD is unlikely to move far Wednesday ahead of the announcement on US monetary policy by the Federal Reserve at 1900 UK time (1800 GMT) and its press conference at 1930, both after the European markets have closed.
However, the strength of the pair persisted Tuesday, with GBP/USD moving above both the 200-day moving average and trendline resistance from the upper boundary of a falling channel in place since June 23. Note though that there is resistance too from another longer-term trendline in place since June 1, around 1.3910, and that could at least slow down any further gains.
GBP/USD PRICE CHART, DAILY TIMEFRAME (FEBRUARY 2 – JULY 28, 2021)
On the bright side, the UK Government has plans to open Englands borders to fully-vaccinated travelers from the EU and the US without the need for them to quarantine on arrival, and that could boost the aviation and tourist sectors and therefore the UK economy more generally, and GBP accordingly.
Note though that the UK recorded 23,511 Covid-19 cases Tuesday, the seventh consecutive day with a lower total than the previous day, but that 131 deaths were registered within 28 days of a positive test, the highest figure since March, according to official data.