On June 16, the US Federal Reserve published the Federal Open Market Committee’s Statement, Economic Projections and Federal Funds Rate. The main news that the markets reacted to was the revelation in the Economic Projections that the central bank could hike interest rates in 2023, as it expects an end to the coronavirus and growth of inflation.
As a result of the announcement, the GBP/USD dropped sharply. By the middle of Thursday’s European trading hours, the currency exchange rate was heading to the combined support of the 1.3950 level and the weekly S3 simple pivot point at 1.3944.
If the rate passes the support of the weekly S3 simple pivot point, the GBP/USD could look for support in the 1.3900 mark.
In the case that the 1.3950 level and the pivot point at 1.3944 provide support, the pair could recover and test the resistance of the 1.4000 level and the weekly S2 simple pivot point at 1.4009.