GBP/USD consolidating below 1.2300 ahead of FOMC

The Sterling keeps its strong gains vs. the dollar on Wednesday, with GBP/USD sidelined in the 1.2260/70 band.

GBP/USD deflates from highs above 1.2300

After climbing as high as the 1.2320 area during overnight trade, the pair has now eased some pips as the European session is under way.

Comments by UK’s PM Theresa May late on Thursday boosted the demand for the beleaguered Sterling and somewhat alleviated fears of a ‘hard Brexit’, helping spot to gain more than 2 cents since lows in the 1.2080 region seen yesterday.

While the pair is gaining more than 1% so far today, market participants will shift the attention to the publication of the FOMC minutes later in the NA session. Consensus looks for a hawkish tilt of the statement following the triple-dissent at the latest meeting, while the next steps of the Fed towards policy normalization will be on top of the agenda.

GBP/USD levels to consider

As of writing the pair is gaining 1.02% at 1.2248 facing the next hurdle at 1.2761 (high pre-‘flash crash’ Oct.7) followed by 1.2820 (20-day sma) and then 1.2893 (near term resistance line). On the downside, a break below 1.2086 (low Oct.11) would expose 1.1450 (low post-‘flash crash’ Oct.7).