Market prepares for US-China trade talks and Federal Reserve policy decision
The GBP/USD currency pair has seen a slight pullback after reaching several-day highs, driven by a strengthening US dollar. Reports indicate that the US and China are set to meet on Saturday to discuss the future of tariffs, providing support for the dollar. Meanwhile, market participants are preparing for the Federal Open Market Committee (FOMC) policy meeting later today.
After weeks of anticipation, the US and China are finally preparing to begin trade negotiations. The ongoing trade war between the two countries has had a significant impact on the global economy, with a recent Reuters poll showing economists’ concerns about a potential global recession. Additionally, President Trump’s tariff measures have dampened demand for US assets in recent weeks.
Fortunately, tensions between the US and China appear to be easing. However, the announcement of new tariffs on the film industry by President Trump has raised concerns about the global economic outlook.
In the meantime, market participants are expecting the Federal Reserve to keep interest rates unchanged later today. Recent US economic data has shown resilience, meaning there is no immediate need for the Fed to cut rates. However, experts believe that the economic outlook may worsen in the coming months, and markets are forecasting a rate cut in July.
On the other hand, the Bank of England is expected to lower interest rates by 25 basis points on Thursday. Policymakers are likely to take a more dovish stance due to the bleak global economic outlook.
Key Events for GBP/USD Today
- Federal Funds Rate
- FOMC Statement
- FOMC Press Conference
GBP/USD Technical Price Analysis: Bulls Challenge Range Resistance
From a technical perspective, GBP/USD is trading above the 30-day moving average, with the RSI above 50, indicating a bullish trend. However, on a larger scale, the price remains within a range between support at 1.3225 and resistance at 1.3401.
Initially, the price showed a bullish trend before pausing and entering a consolidation phase. Meanwhile, the RSI has formed a series of lower highs, suggesting a bearish divergence. Nevertheless, bulls remain in control within the range, and a challenge of the resistance level is likely. A breakout above the resistance will confirm the continuation of the previous trend. On the other hand, if bears regain control, a drop below the 1.3225 support level may signal a trend reversal.
Related Topics:
