Gbpusd rises ahead of key fed rate decision

GBPUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.36%	44.9 Pips
Week to-date	0.38%	47.8 Pips
January	-0.44%	-55.6 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)

What happened lately

In December, the United States saw its new-home sales increase by 3.6%, marking a slowdown from the 5.9% growth experienced in November. This data suggests a deceleration in the housing market, potentially due to rising interest rates and weakening consumer confidence. The housing market is a significant component of the U.S. economy, and changes in new-home sales numbers can have ripple effects on related industries such as construction, finance, and retail. The deceleration in growth could be indicative of broader economic challenges or simply a temporary fluctuation. However, it remains below the November figures, suggesting cautious optimism among industry analysts.

The GBPUSD currency pair rose by 0.36% to 1.24940 on Monday. The upcoming U.S. Federal Reserve Interest Rate Decision, scheduled for Wednesday at 07:00 PM, is a significant event that typically has a substantial impact on currency markets. An increase in the federal funds rate generally strengthens the U.S. dollar, which could lead to a depreciation in the GBPUSD pair if the decision aligns with hawkish expectations. Conversely, if the rate decision signals a dovish or unchanged stance, the pound may continue to appreciate against the dollar. Given the background of slowing new-home sales growth, market participants will closely watch the Fed’s decision for cues on the future monetary policy trajectory.

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What can we expect from GBPUSD today?

GBPUSD on Monday rose 0.36% to 1.24940. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for GBPUSD looks bullish as the pair ended higher after Monday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 1.25362 with break above could target R2 at 1.25785 or figure level area. While towards the downside, we are looking at daily low of 1.24255 as an important support. Break below this level could weaken the current bullish momentum. A break above 1.25231 may suggest continuation after recent positive movement.

For the week to-date, take note that GBPUSD is mixed as compared to the prior week.

Key levels to watch out:

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