GBP/USD has gained traction on improving market mood on Wednesday.The pair needs to clear 1.3100 to extend rebound.A hawkish Fed policy outlook could provide a boost to the dollar.
GBP/USD has continued to edge higher toward 1.3100 early Wednesday after having closed the previous day in positive territory. The improving market mood seems to be making it difficult for the greenback to find demand but investors might refrain from committing to large positions ahead of the Federal Reserve’s policy announcements.
Russian Foreign Minister Sergey Lavrov said on Wednesday that peace talks with Ukraine were not easy but added that there were hopes for compromises. “Some formulations of agreements with Ukraine are close to being agreed,” Lavrov added.
The UK’s FTSE 100 Index is up more than 1% in the early European session and S&P Futures are rising 1%, confirming the positive shift in risk sentiment. Meanwhile, the US Dollar Index is down 0.3% at 98.70.
GBP/USD Technical Analysis
On the four-hour chart, GBP/USD stays afloat above the 20-period SMA but the Relative Strength Index (RSI) indicator stays near 50, suggesting that buyers are yet to take control of the pair’s action.
1.3100 (psychological level, 50-period SMA) aligns first resistance. In case this level turns into support, next bullish targets are located at 1.3150 (static level) and 1.3200 (psychological level).
On the downside, 1.3050 (former static resistance, 20-period SMA) could be seen as interim support before 1.3000 (psychological level).
EUR/USD clings to recovery gains near 1.1000 ahead of Fed.EUR/USD trades in positive territory near 1.1000 on Wednesday as the dollar stays on the back foot. The data from the US showed that Retail Sales rose by 0.3% in February, compared to the market expectation of 0.4%. Later in the session, the US Federal Reserve is expected to hike its policy rate by 25 basis points.
GBP/USD extends rebound, trades near 1.3100.GBP/USD preserves its recovery momentum and trades near 1.3100. The positive shift witnessed in market mood is weighing on the dollar ahead of the Fed’s policy announcements. Meanwhile, the US Census Bureau reported that Retail Sales in the US rose by 0.3% in February to $658.1 billion.