GBP/USD stays fragile and at mercy of dollar's market valuation

GBP/USD seems to have stabilized around 1.3500 early Wednesday. But in the view of FXStreet’s Eren Sengezer, it is too early to say that the pair has gone into a recovery phase.

Markets eye FOMC's January policy announcements

“If FOMC Chairman Jerome Powell notes that they could start shrinking the balance sheet in the second half of the year instead of ‘toward the end of the year’ this could have a bullish impact on the dollar and weigh on GBP/USD. On the other hand, Powell might adopt a cautious tone on policy tightening and cause the dollar to face renewed selling pressure. In that case, GBP/USD should extend its rebound, at least in the near-term.”

“On the downside, 1.3460 (200-period SMA, Fibonacci 50% of the latest uptrend) aligns as first support ahead of 1.3410 (Fibonacci 61.8% retracement).”

“Resistances are located at 1.3530 (Fibonacci 38.2% retracement) and 1.3580 (50-period SMA, 100-period SMA).”

See – Fed Preview: Forecasts from 14 major banks, building a March hike