img(src="https://www.facebook.com/tr?id=606031673284807&ev=PageView&noscript=1" height="1" width="1" style="display:none")
GBP/USD: The Pre-Fed Trading Depicting Lull Beyond 1.2900

GBP/USD: The Pre-Fed Trading Depicting Lull Beyond 1.2900

  • GBP/USD recuperates from an intraday low of 1.2912 while approaching the most significant levels since March 11 flashed on Tuesday. 

  • Northern Ireland gets blow in post-Brexit laws of the bloc as EU Lobbyist claims Brexit deal will come.

  • UK PM Johnson, Germany's RKI head cites the expanding risk of virus wave 2.

  • UK-China row warms up,  London School of Economics updates, British retail sales challenge the bulls.


  • GBP/USD recuperates from an intraday low of 1.2912 while approaching the most significant levels since March 11 flashed on Tuesday. 

  • Northern Ireland gets blow in post-Brexit laws of the bloc as EU Lobbyist claims Brexit deal will come.

  • UK PM Johnson, Germany's RKI head cites the expanding risk of virus wave 2.

  • UK-China row warms up,  London School of Economics updates, British retail sales challenge the bulls.


GBP/USD gets the offers around 1.2935 while everyone is heading London on Wednesday. The pair has lately recuperated ahead of the key Federal Reserve (Fed) monetary policy meeting. And yet, negativity encompassing Brexit, coronavirus (COVID-19) wave 2.0, and the UK-China tussle burden the pair before the key US event.


Earlier in Asia, US Senate members disappointed the markets with indications of further postponements of the much-anticipated fiscal package. The UK PM Boris Johnson and Lothar Wieler, head of the Robert Koch Institute (RKI), also poured cold water over their expectations by talking about the imminent second wave of the pandemic.


The pound’s movement has been influenced by the downbeat statements of the London School of Economics (LSE) and Rain Newton-Smith, chief economist at the Confederation of British Industry (CBI). As reported by BBC News,  the LSE  said that “a Brexit hit is looming for sectors that have emerged relatively unscathed from the COVID-19 pandemic.” On the other hand, a representative from CBI spoke about the ongoing recuperation in the UK's Retail Sales figures.


Charles Grant, director of the Center for European Reform (CER), said that “he is optimistic a post-Brexit trade deal will be reached between the UK and EU - despite the current stalemate. The commentator acknowledges that failure is possible, but highlights five reasons why he is confident the two sides will break a deal before the year is out.” Nevertheless, the worries that UK drivers in Northern Ireland will require a green light for traveling in the Republic of Ireland and the European Union from next year defy the optimism.


Britain offers a 500 million-pound ($647 million) fund to help film production companies restart productions after they have complained that they couldn't get insurance because of the coronavirus pandemic. Discussing the political issues, British foreign minister Dominic Raab emphasized that China is expected to regain worldwide trust. The UK policymaker likewise told the top Chinese diplomat, Wang Yi, that Britain will closely monitor Hong Kong Legislative Council elections in September.


Moving ahead, worldwide markets may remain less active and move carefully before the US Fed's monetary policy meeting. The dovish tone of Chairman Jerome Powell could apply further pressure on the US dollar.


Technical Analysis


The pair battles with the opposition line of a month to month rising channel on the four-hour chart in the midst of overbought RSI conditions. Resulting in the sellers currently targeting every week’s line of support, close to 1.2850/45, as a prompt rest ahead of returning to July 21 top close to 1.2770 and the mid-June top near 1.2690. In the meanwhile, a supported ascent past the most recent high close to 1.2950 will require a clear break of 1.3000 thresholds to aim at  February 13 high of 1.3069 and March 2020 peak close to 1.3200.



Economic Calendar Highlights


  • USD: Pending Home Sales (MoM) (Jun): 3:00pm UK Time

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. 

A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

  • USD: Crude Oil Inventories 3:30pm UK Time

The Energy Information Administration's (EIA) Crude Oil Inventories quantifies the week after week change in the quantity of barrels of business raw petroleum held by US firms. The degree of inventories impacts the cost of oil based goods, which can affect expansion.

On the off chance that the increase of crude inventories is more than anticipated, it infers more vulnerable interest and is bearish at unrefined costs. The equivalent can be said if a decrease in inventories is not exactly anticipated. 

In the event that the crude increase is not exactly expected, it infers more prominent interest and is bullish at unrefined costs. The equivalent can be said if a decrease in inventories is more than anticipated.

  • USD: Fed Interest Rate Decision: 7:00pm UK Time

Federal Open Market Committee (FOMC) members vote on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation. 

A higher than expected rate is positive/bullish for the USD, while a lower than expected rate is negative/bearish for the USD.