Good morning Traders!
Yesterday we received the Federal Funds Rate, where the market was expecting a rise of a quarter of a precent to 4.75% which is what the FED has delivered. Investors went on to cheer comments from Chair Jerome Powell that the “disinflation process has started” and sold off the US dollar.
GBPUSD is consolidating in a tight range underneath the Resistance level of around 1.2450. Following the FED action yesterday, we saw the market raising from it’s lows to print an ever so slightly Higher Low.
If the market will break through this resistance level, then it will also be confirming an uptrend on the weekly chart, however the Monthly chart remains in a downtrend. I’d like to see either a compression of price against this level, making Equal Highs and Higher Lows before a potential break of this level, or a strong decisive break and a close above the level, followed by a pullback to test this level from above.
Note that the Bank of England is due to deliver their Official Bank Rate and Monetary Policy Summary at 12.00pm GMT. Big economic news may see volatile moves in the market, so risk management is of paramount importance.