GBP/USD Drops to Monthly Lows Ahead of FOMC
- GBP/USD Trades to Daily Lows Ahead of Tomorrow’s FOMC Event
- Current GBP/USD Monthly Lows are Found at 1.2947
- What’s next for the EUR/USD and US Dollar Pairs? Learn more with our Trading Guide
The GBP/USD is trading to new weekly lows after prices have broken below the critical 1.3000 value of support. While it was expected that US Dollar pairs may breakout tomorrow with the latest FOMC rate decision, the GBP/USD is already losing ground as traders speculate on the likelihood of a FED rate hike. Technically the GBP/USD is currently in a downtrend with prices declining as much as 498 pips from the monthly high at 1.3445. Trades should continue to monitor short-term price momentum going into tomorrow’s news to determine if this trend is set to continue, or retrace towards points of resistance.
GBP/USD, Daily Chart:
(Created using Marketscope 2.0)
In the 10-minute graph below, the GBP/USD can be seen bouncing from this morning’s low of 1.2947. The Grid Sight Index (GSI) has interpreted this move as a developing short-term uptrend as the pair has continued to rise in the last 30 minutes of trading. After reviewing 48,444,623 pricing points, GSI has indicated that price action has continued to advance by 20 pips or more in 46% of the reported 59 historical matching events. If prices continue to retrace this morning’s move, traders should look for the GBP/USD to move through the first bullish historical distribution at 1.2988. A move through this point would indicate that the GBP/USD is at least temporarily supported, allowing traders to target new values of resistance.
Alternatively, GSI has indicated that prices have declined by 21 pips or more in 44% of the 59 historical matches. Today’s first bearish historical distribution is found at the Cables daily low of 1.2947. A move through this value would suggest that the GBP/USD is prepared to continue this morning’s decline. In this scenario, traders may look for the pair to continue moving lower towards the August 2016 swing low at 1.2865.
Want to learn more about GSI? Get started learning about the Index HERE.
(Created using Grid Sight Index)
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.