• GBP/USD slipped lower on Wednesday as greenback rebounded ahead of a Federal Reserve monetary policy decision.
• The Federal Reserve is expected to keep rates unchanged on Wednesday, with investors anticipating the pause to extend beyond Jerome Powell’s final meetings in March and April, as policymakers remain divided over the need for further rate cuts ahead of his successor taking office this summer.
• Recent data showed the U.S. unemployment rate slipped to 4.4% in December despite soft job growth, while economists expect core PCE inflation to rise to 3% year-on-year, well above the Fed’s 2% target.
• The Fed will release its policy decision at 2 p.m. EST (1900 GMT), and Powell is scheduled to begin a press conference half an hour later to elaborate on the rate decision and economic outlook.
• Technical signals are bullish as RSI is at 69, daily momentum studies 5, 9 and 10 DMAs are trending up.
• Immediate resistance is located at 1.3851(23.6%fib), any close above will push the pair towards 1.3900(Psychological level)
• Strong support is seen at 1.3667 (38.2% fib) and break below could take the pair towards 1.3571(50% fib).
Recommendation: Good to buy around 1.3720 with stop loss of 1.3650 and target price of 1.3800
