- The GBP/USD is paring gains seen in recent days.
- Fear of a no-deal Brexit and the upbeat FOMC Minutes weigh.
- The technical picture is mixed for the pair.
The GBP/USD is leaning lower, getting further away from 1.2900. The US Dollar is strengthening across the board following Wednesday’s FOMC Meeting Minutes. While expressing some concern on trade, the Fed is generally optimistic about the US economy and conveyed the same message of raising rates gradually. A September rate hike seems like a done deal.
The US Dollar received an additional boost from the fresh tariffs that the US imposed on China. While the additional duties worth $16 billion of Chinese products were expected, it comes as a blow to ongoing negotiations to resolve the issues between the world’s largest economies.
In the UK, Brexit Minister Dominic Raab stepped up preparations for a no-deal Brexit. Documents detailing the technical aspects of what will happen after the UK leaves the EU are published. Making such moves is not a good sign for the negotiations. On the other hand, Raab said that the withdrawal deal is 80% agreed. Markets do not seem to be convinced.
On Tuesday, Raab and his EU counterpart Michel Barnier agreed to hold non-stop talks, and the announcement sent cable higher.
Later in the day, the troubles of US President Donald Trump may return to the limelight. The greenback dropped on the allegations that Trump knew about the hush money to his lovers, in what is deemed as illegal campaign financing.
GBP/USD Technical Analysis
The GBP/USD is losing the levels seen in recent days. While Momentum is still positive, the Relative Strength Index is beginning to lean lower.
Support awaits at 1.2810 which supported the pair on its way up earlier in the week. Further down, 1.12760 capped the GBP/USD last week, and it is followed closely by 1.2730 which provided support to the pair on its way up.
Looking up, 1.2940 is the peak seen on Wednesday. The round number of 1.3000 is next up, followed by 1.3045 which played a role in both directions early in August.
