• The dollar was firm ahead of the Fed’s policy meeting on Wednesday.

• The outlook for rate cuts in the US has diverged significantly from other countries.

• Market participants expect the first BoE cut in August.

The GBP/USD price analysis reveals a mild bullish sentiment continuing from last week’s momentum. However, the dollar endeavors to firm up ahead of Wednesday’s Fed policy meeting.

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Notably, the pound fell as the impact of last week’s upbeat data wore off, allowing traders to focus on the policy divergence between the BoE and the Fed. Moreover, investors anticipate a hawkish Fed meeting on Wednesday.

Most recent economic reports from the US point to a delay in rate cuts. Additionally, policymakers have assumed a more hawkish stance as they lose confidence that inflation will reach the central bank’s target. As a result, the outlook for rate cuts in the US has diverged significantly from that of other countries, including Britain.

At tomorrow’s meeting, investors will focus on the central bank’s new economic projections. Moreover, they will watch Powell’s speech for clues on when the Fed might start cutting rates. Currently, markets place a lower 58% chance that the central bank will cut in September. At the same time, the likelihood of a cut in December has risen to nearly 80%.

On the other hand, market participants expect the first BoE cut in August, well ahead of the Fed. This has kept the pound subdued. However, it recently rallied after upbeat business activity data from the UK indicated a recovery in the economy. The rally paused when market focus returned to the FOMC meeting.

GBP/USD key events today

• US employment cost index (q/q)
• US CB consumer confidence

GBP/USD technical price analysis: Uptrend pauses at solid resistance zone

On the technical side, the GBP/USD price trades at a strong resistance zone. However, the bias is bullish because it trades above the 30-SMA, and the RSI is in bullish territory. Still, it faces downward pressure from the 1.2550 key resistance level and solid resistance trendline.

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Consequently, bears might emerge to push the price lower and reverse the trend. They must break below the 30-SMA with the RSI dipping below 50 to do this. However, if bullish momentum remains strong, the price could break above this resistance zone and rise to retest the 1.2701 key resistance level.

https://www.forexcrunch.com/blog/2024/04/30/gbp-usd-price-analysis-buyers-dominate-ahead-of-fomc/