The Pound drops slightly after the U.S Dollar strengthens following the Fed's FOMC statement. Compared to other currencies, the Pound did not get heavily affected by the strength in the greenback as the market awaits today's BoE meeting. So far, chances of a BoE rate hike remains above 90% and if the BoE panel follows up with the market expectations, the Pound will strengthen and ignore the significant strengthening of the U.S Dollar. Investors need to watch out for a reverse scenario as it is still a possibility. A no rate hike scenario will lead to a large drop in the Sterling currency with a combination of a decrease in demand for the British Pound and the strengthening U.S currency.
Following last week's 0.618 Fibonacci retracement rejection, the Pound has recently rejected the 0.5 Fibonacci retracement creating a lower high. This lower high is an indication of a possible continuation of the general downtrend. A break below the 1.30819 support level will pave the way for a drop towards the next support level at 1.30181.
Support: 1.30819 1.30181
Resistance: 1.31622 1.32159