GBP/USD: Hawkish FOMC Minutes Curb Sterling's Big Bid
GBP/USD has lost the 1.46 handle on the back of hawkish minutes from the FOMC meeting in April.
The minutes showed that most officials saw June hike 'likely' if economy warranted. This fuelled speculation, especially after the recent surprise spike in CPI and hawkishness from Fed speakers Lockhart and Williams yesterday that June is indeed a live meeting.
However, the minutes also highlighted risks and some cited Brexit and China as risks along with the projection for inflation that were still judged as weighted to the downside, but that was before the better than expected CPI results earlier this week. All in all, there was a range of views on whether data would support June hike and hence we are not in absolute free-fall in Sterling, especially given the jobs data that came out in the UK and stay came leading in the polls with the subsequent rally from 1.4420 to highs of 1.4633.
1.4665 is a key resistance to the upside with daily closes above there opening a target towards 1.4808, the 200 day ma. To the downside, on the wide given these volatile and large swings, closes below 1.4336, the 55 day and 100 dma converging at 1.4343 ma could open up a target for 1.4180/00 and the 2 month uptrend. Near term, the 20 dma is located at 1.4485 as support on a break below the psychological 1.45 handle.