GBPUSD Find Support at 1.2900, FOMC Meeting Minutes Eyed
The pound was the biggest loser among the major currencies yesterday as forex traders were unimpressed by the poll results of UK Prime Minister Boris Johnson. GBPUSD traded steadily lower after reaching an intraday high at 1.2969 to a low of 1.2908. The exchange rate of pound to dollar today, November 20, 2019, opened at 1.2923.
The first live TV debate between Tory leader Boris Johnson and Labour leader Jeremy Corbyn did not spark wild swings in yesterday’s forex trading session. They stuck to their agenda, discussing Brexit and second referendum. However, results of the snap polls after the debate may have dragged the pound exchange rate lower against its counterparts. YouGov polls showed that only 51% of the audience thought Johnson won while Corbyn got 49%. This may have come off as a surprise as previous polls show that the Conservatives lead by a dominant margin. Forex traders may not have expected the debate results to show almost a stalemate.
On the other side of the Atlantic, New York Federal Reserve President John Williams may have pushed the dollar to pound exchange rate in favor of the greenback. In a conference, he was quoted to describe monetary policy being in the “right place” and “the economy is right where we would like it to be.”
Today’s calendar is blank from reports from the UK. This means that forex traders will take their cue from the FOMC Meeting Minutes which is scheduled to be released at 7:00 pm GMT.
If the report reflects Fed official William’s sentiment, GBPUSD could fall below support around 1.2900 at the rising trend line (from connecting the lows of November 8, November 14, and November 19). Using the Fibonacci retracement tool and drawing from the low of November 14 to the high of November 18, we also see this area coincide with the 50% Fib level. If it does not hold, the next support level will be at 1.2825 where the currency pair made lows last week.
On the other hand, if the minutes of the last Fed meeting shows that policymakers are still keen on lowering interest rates even further, we could see GBPUSD rally to resistance at 1.2970. Remember that in their last meeting, the Federal Reserve kept rates steady and hinted that they would no longer cut rates this year. A report divergent from this tone will be bearish for the US dollar and could benefit the British pound.Download our latest quarterly market outlookfor our longer-term trade ideas.
Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.