British pound under pressure ahead of Fed and BoE meeting next week
Risk-off moods can be spotted on the Forex market at the end of the week. GBPUSD fell sharply during today's session as weak quarterly results posted by US Tech-giants and concerns about inflation and tight monetary policy dampened market sentiment. Risk-sensitive currencies like the British pound and Euro dropped following the release of PCE and University of Michigan figures, which fueled concerns over inflation. Also tensions between UK and EU regarding Irish border and fishing rights additionally weighed on Sterling. This week, France seized a British boat, and the UK government threatened to retaliate against French fishers. PM Boris Johnson and France President Emmanuel Macron will hold a meeting this weekend in order to solve the problem. Meanwhile the European Commission has told member states that the role of the European Court of Justice in the North Ireland protocol is not up for discussion. Also some investors decided to use month-end flows to book profits ahead of a Fed and BoE monetary policy meeting which will take place next week.
GBPUSD has been trading under selling pressure today and fell over 0.80%. Currently the pair is testing support at 1.3675, which coincides with 38.2% Fibonacci retracement of the last upward wave and 200 SMA (red line). Should break lower occur, next Fibonacci retracements should be considered as new targets for bears. Source: xStation5
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