Key Highlights
- The US Dollar and British Pound awaits key risk events today such as the fed interest rate decision, US CPI and UK’s employment report.
- GBP/USD is forming a contracting triangle on the 4-hour chart with support at 1.3300 and resistance near 1.3480.
- UK’s Claimant Count is forecasted to post a change of 3.2K in Nov 2017.
- The feds are likely to increase interest rates from 1.25% to 1.50% for the third time in 2017.
GBPUSD Technical Analysis
Today, there are many major economic releases lined up in the US and the UK. Both the US Dollar and British Pound would be impacted, especially the GBP/USD pair.
Technically, the pair held the 1.3300 support zone recently and is currently forming a contracting triangle on the 4-hour chart with support at 1.3300 and resistance near 1.3480.
The pair recently failed near the 23.6% Fib retracement level of the last drop from the 1.3520 high to 1.3310 low. Moreover, there are many barriers on the upside such as 1.3400 and 1.3450 waiting to stop the current upside move.
The overall price action is negative for GBP/USD heading into key risk events today. Only a successful close above 1.3400 followed by the 50% Fib retracement level of the last drop from the 1.3520 high to 1.3310 low would be a positive sign.
In the mentioned scenario, the pair might even attempt an upside break above the triangle resistance at 1.3480. On the flip side, if buyers fail to contain losses below 1.3300, the pair could decline sharply towards 1.3200.
Impact of Fed Interest Rate Decision
Today, Fed interest rate decision could be a game changer for the US Dollar. The central bank is expected to increase interest rates from 1.25% to 1.50% for the third time in 2017.
If they fail to deliver, it could be a bullish opening for GBP/USD. On the other hand, should they raise rates, the pair might come under a bearish pressure.
Recently, the UK saw the release of the CPI numbers for Nov 2017. The result was better than the forecast of +3.0% as there was a rise of 3.1% in the CPI (YoY). In terms of the monthly change, there was a rise of 0.3%, better than the last +0.1%.