GBP/USD trades near 1.3380 on Tuesday, holding above its 20-day EMA at 1.3320 after a rally off the June low near 1.3140. Traders await Wednesday’s FOMC minutes for fresh cues on the Fed’s policy path, while UK political change and firm fiscal expectations underpin the Pound.
The Pound holds a constructive tone against the Dollar, trading near 1.3380 during Tuesday’s European session even as it ticks lower on the day. Cable stays broadly upbeat because it holds above a key Exponential Moving Average, the near-term line traders watch for direction. The pair remains above its 20-day EMA at 1.3320.
The pair edges down as the Dollar firms slightly. The US Dollar Index, which tracks the Greenback against six major currencies, trades 0.1% higher near 100.90.
Traders wait on FOMC minutes
The Dollar is expected to trade cautiously before the Federal Open Market Committee minutes of the June meeting, due Wednesday. Investors will read them closely for fresh cues on the Federal Reserve’s monetary policy outlook.
Meanwhile, UK politics is supporting the Pound. Firm hopes that current fiscal principles will continue despite the leadership transition are helping Sterling, with Andy Burnham the front-runner for UK leadership after Prime Minister Keir Starmer’s resignation.
The technical picture
Cable has staged a rally after attracting significant buying interest near 1.3140 two weeks back. Momentum is mildly positive, with the Relative Strength Index (14) at 55.7, hinting that buyers retain control without the market looking overstretched.
On the topside, the next hurdle is a downward-sloping resistance trend line around 1.3526 that caps the broader recovery. On the downside, initial support sits at the 20-day EMA at 1.3320 ahead of the June low near 1.3140.
A separate technical read points to congestion resistance at 1.3400, where a break higher could extend late-June gains toward further congestion around 1.3450.
Sources: FXStreet, Continuum Economics (snippet-based)
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