GBP/USD upside faltered at 1.5980

FXstreet.com (Edinburgh) -It seems the area around 1.5980 is now offering decent resistance, rejecting the GBP/USD to the current region of 1.5965/60.

GBP/USD now focused on Fed

After upbeat BoE minutes, GBP traders are now waiting for the biggest event of the week, the FOMC gathering. Despite the close call on QE tapering, a dovish tone by Chairman Bernanke in his press conference could well see the pair through the psychological mark at 1.6000. According to analysts at TD Securities, “The MPC acknowledged the better UK activity lately and upgraded their growth outlook for the remainder of the year, but perhaps more importantly they did not make any attempt to push back on the recent rise in Gilt yields… All eyes now shift to the Fed for the next sharp move”.

GBP/USD relevant levels

As of writing the pair is up 0.38% at 1.5965 with the net resistance at 1.6008 (high Jan.18) followed by 1.6040 (high Jan.17) and then 1.6056 (rising channel top). On the downside, a breach of 1.5886 (low Sep.17) would expose 1.5869 (low Sep.16) and finally 1.5776 (low Sep.12/13).

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The USD trades from steady to slightly lower versus major competitors heading into the FOMC monetary policy decision. While expectations are that the Fed will proceed with a light taper ($10 billion to its current $85 billion program), investors will be closely watching forward guidance.
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