GBP/USD – Risk-On Sentiment Led By An Optimistic FOMC

#OPINIONLEADER# #Signal#

 JUL 29, 2021

• Market went risk-on after FOMC meeting
• FOMC held monetary policy unchanged
• Strong upside on GBP/USD

Chart 1: GBP/USD D1 chart

The U.S. FOMC delivered an upbeat tone earlier today during their monetary policy meeting, acknowledging the robust economic recovery in the U.S. as it progresses towards the central bank’s goals. (Refer to this article for a detailed coverage on what went down during the monetary policy meeting.) As a result, the market went risk-on, leading to an increase in demand of risky currencies like the British pound and a decline in demand of safe haven currencies like the U.S. dollar. This provided a boost to GBP/USD, causing it to take on the 1.39 handle.

At the moment, our technical indicators are indicating signs of upward momentum in GBP/USD. This presents good buying opportunities above the 1.39 handle.

Trade Setup for GBP/USD (D1)

Buy Stop at 1.3980

Upcoming major news that may impact price movement of GBP/USD

29 July – U.S. Advance GDP q/q data release at 2030 (GMT+8)

31 July – FOMC committee member Brainard speaking at 0830 (GMT+8)

02 August – U.S. ISM Manufacturing PMI data release at 2200 (GMT+8)

04 August – U.S. ISM Services PMI data release at 2200 (GMT+8)

05 August – Bank of England monetary policy announcement at 1900 (GMT+8)

06 August – U.S. jobs report release at 2030 (GMT+8)