GBPUSD Chart Technical Outlook set to advance toward 1.3197 ahead of the Fed, needs a 50-bps cut to extend gains.
UK core inflation remains stubbornly high at 3.6%, strengthening the notion that the Bank of England will leave rates unchanged in its decision tomorrow. The Pound is strengthening.
For today, the bigger event is the Fed decision. Markets are torn between views of a 25-bps cut and a 50-bps cut. Pricing leans toward a bigger 50-bps cut. If that happens, and the Fed expresses confidence in the economy, the US dollar will continue to decline. According to current pricing, a 25-bps move would send the Greenback soaring, as this possibility has a lower chance.
I expect the Fed to accompany its rate decision with a confident message, weighing on the Greenback.
GBP/USD faces resistance at 1.3197, then 1.3239 and 1.3267. Support is at 1.3148, followed by 1.3113 and 1.3051. The pair is above the 4h-50 SMA, a bullish sign.
