GBP/USD Forecast 18/09: Grinds Higher Ahead Of FOMC (Video)

(MENAFN- Daily Forex)

• The British Pound is slightly higher during early trading on Wednesday as we're waiting for the FOMC statement, interest rate decision and press conference in the United States.
• That obviously means that there will be a lot of volatility today. I would not be surprised at all to see a major choppy move in both directions.

Things Could Get Tough Later

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So do keep in mind that this is a market that could be very difficult to get your hands around. As things stand right now though, it looks very bullish and clearly breaking above the 1.36 level was a good sign. We saw the British Pound and the Euro, and a few others all break major levels. The question at this point is whether or not they can sustain that. If Chairman Powell does not thread the needle during the press conference, later today, the US dollar could find itself suddenly strengthening as people freak out again.

Traders believe that there are three interest rates coming, uh cuts coming down the road, and therefore it is worth noting that anything that suggests that they are not going to get the 75 basis points of interest rate cuts could really disrupt the markets, at least in the short term.

EURUSD Chart by TradingView

If we do break to the upside, the 1.37 level will be a bit resistant, but I think clearing that opens up the possibility of a move to the 1.38 level. Short-term pullback should see support at the 1.36 level as it was previous resistance. A little bit of market memory comes into the picture. However, keep in mind that if there is something that is said during the statement or the press conference that rattles the markets, they won't care about 1.36 being support. It'll just slice right through it. So, with all of that being said, it is cautiously optimistic here. But be aware of the fact that we've got some volatility ahead later during the session.

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