The GBP/USD currency pair is trading nearly flat at around 1.3355 during the European session on Wednesday, as market participants await the release of the Federal Open Market Committee (FOMC) minutes from the June policy meeting, scheduled for 18:00 GMT [1]. The US Dollar Index (DXY) is marginally lower, hovering near 101.05, reflecting a cautious tone among traders ahead of the FOMC publication [1].
The FOMC previously decided to keep interest rates unchanged within the 3.50%-3.75% range, citing persistent upside inflation risks. Notably, 9 out of 19 Fed policymakers favored an interest rate hike by the end of the year, highlighting a split in views regarding future monetary policy direction [1]. Investors are expected to scrutinize the minutes for insights into the rationale behind the Fed's decision to abandon forward guidance and for clues about the potential trajectory of US interest rates [1].
On the technical front, GBP/USD maintains a mildly bullish bias, trading above the 20-day exponential moving average (EMA) at 1.3321. The pair's bounce from the recent 1.32 area and its ability to stay supported by the short-term EMA suggest a tentative recovery phase. The Relative Strength Index (RSI) stands at 52.8, indicating modest positive momentum without reaching overbought levels. The next significant resistance is the downward trend line near 1.3500, while immediate support is reinforced by the 20-day EMA at 1.3321. A daily close below this level could weaken the constructive tone and prompt a retest of the June 24 low at around 1.3140 [1].
Meanwhile, the British Pound is struggling for direction as investors seek clarity on the UK's fiscal policy outlook under new leadership. Andy Burnham, newly elected Member of Parliament and Mayor of Greater Manchester, is considered the front-runner for UK leadership following Prime Minister Keir Starmer's resignation. Burnham has stated his intention to continue Labour's manifesto, which may provide some stability to fiscal policy expectations [1].
CONCLUSION
GBP/USD is consolidating near 1.3355 as traders await the FOMC minutes for guidance on US monetary policy. Technical indicators suggest a mildly bullish bias, with key resistance at 1.3500 and support at 1.3321. The pair's direction will likely hinge on the tone of the FOMC minutes and developments in UK fiscal policy leadership.