- The main event of the day is the Fed’s interest rate decision, which will have a significant impact on currency dynamics.
- Traders will also check the ADP report on the development of employment in the United States
- A move below the support at 1.2475 will push GBP/USD towards the next support level at 1.2450.
Sterling remains under pressure ahead of Fed interest rate decision
GBP/USD is currently trying to settle below support at 1.2475, while the US Dollar is gaining ground against a large basket of currencies.
The US Dollar Index is near the resistance level at 103.60. This resistance level has already been tested several times in recent trading sessions and has proven its strength. If the US Dollar Index breaks above 103.60, it will move towards the next resistance at 103.80, which will be bearish for GBP/USD.
Today, traders in the FX market will focus on the Fed’s interest rate decision and subsequent comments from Fed Chairman Powell. The rate is expected to be lifted from 0.5% to 1.0%, and the key question is whether Powell’s comment is hawkish enough to trigger another rise in the dollar.
Traders will also have the opportunity to take a look at the ADP report on the development of employment in the United States. Analysts expect the report to show private companies added 395,000 jobs in April.
GBP/USD is testing the support level at 1.2475. If this test is successful, GBP/USD will move towards the next support, which is at 1.2450.
A move below support at 1.2450 will open the way to test the next support level at 1.2415. If the GBP/USD falls below this level, it will head towards the support at 1.2390.
On the upside, the closest resistance level for the GBP/USD stands at 1.2510. In case the GBP/USD pair manages to get back above this level, it will head towards the resistance at 1.2530.
A successful test of resistance at 1.2530 will push GBP/USD towards resistance at 1.2565. If GBP/USD breaks above this level, it will head towards the next resistance level at 1.2600.
For an overview of all of today’s economic events, check out our economic calendar.