GBP/USD clears some gains after Fed's decision and Dot Plot revision

Source Fxstreet
Jun 12, 2024 18:18
  • The Fed held rates steady at 5.25%-5.50% as expected.
  • The dot plot indicated that most of the FOMC members are seeing fewer rate cuts this year.
  • As an initial reaction, the USD recovered and the pair cleared some of its daily losses.

On Wednesday, the GBP/USD cleared some of its gains following the Federal Reserve (Fed) decision to hold rates steady at 5.25%-5.50% and stands at 1.2830. What strengthened the USD is that the Dot Plot suggested that the members are seeing two instead of three rate cuts in 2024.

Regarding economic protections, the bank revised its Personal Consumption Expenditures (PCE) forecasts to 2.4% YoY from 2.6% YoY, while growth protections remain unchanged. The interest protections, via the so-called Dot Plot,  showed an upward revision of the interest rates by the end of 2024 now at 5.1%, up from 4.6%, and for the 2025 at 4.1%, up from 3.9%. The proyection for 2026 stood at 3.1%, and the longer-run rate has been revised to 2.8% from 2.6%. 

As a reaction, the USD recovered some ground following the soft Consumer Price Index (CPI) figures from May which triggered a sharp decline in US Treasury bond yields earlier in the session. The US 2,5 and 10 rates cleared some losses but are still down by more than 2%.

GBP/USD Technical analysis

Indicators on the daily chart significantly recovered and remain deep in positive terrain. The Relative Strength Index (RSI) moved towards 60 while the Moving Average Convergence Divergence (MACD) prints decreasing red bars, indicating a decreasing selling pressure. The overall outlook remains positive as the pair rides above the 20,100 and 200-day Simple Moving Averages (SMA).

GBP/USD

Overview
Today last price 1.2839
Today Daily Change 0.0099
Today Daily Change % 0.78
Today daily open 1.274
 
Trends
Daily SMA20 1.2734
Daily SMA50 1.2606
Daily SMA100 1.2639
Daily SMA200 1.2547
 
Levels
Previous Daily High 1.2752
Previous Daily Low 1.2706
Previous Weekly High 1.2818
Previous Weekly Low 1.2695
Previous Monthly High 1.2801
Previous Monthly Low 1.2446
Daily Fibonacci 38.2% 1.2734
Daily Fibonacci 61.8% 1.2723
Daily Pivot Point S1 1.2713
Daily Pivot Point S2 1.2687
Daily Pivot Point S3 1.2668
Daily Pivot Point R1 1.2759
Daily Pivot Point R2 1.2778
Daily Pivot Point R3 1.2805

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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