Photo by Colin Watts on Unsplash 
 

GBP/USD holds firm on Monday at around 1.3325, below the 200-day Simple Moving Average (SMA) of 1.3329 as investors wait for the Federal Reserve’s (Fed) monetary policy decision, which kept the US Dollar (USD) steady across the G10 FX board.

GBP/USD tests key resistance zone as Investors await central bank moves
 

On Wednesday, the Fed will unveil its last policy decision of the year, with traders pricing in an 86% chance of a 25-basis-point (bps) rate cut. Most analysts expect a possible Fed 'hawkish cut' in the statement language. The members of the Federal Open Market Committee (FOMC) will update their economic projections for the next year, laying the path for interest rates for the future.

In the UK, Gross Domestic Product (GDP) figures for October are due on Friday, with economists expecting 1.4% YoY growth and a 0.1% MoM expansion from the September reading.

Despite this, the labor market has shown signs of weakening, which keeps money markets pricing in an 87% chance of the Bank of England (BoE) cutting rates at the December meeting.

In the meantime, an earthquake hit Northeastern Japan, according to Nikkei Asia. They wrote, “A powerful quake with a preliminary magnitude of 7.6 struck northeastern Japan late Monday night, with the weather agency issuing a tsunami warning for coastal areas of Hokkaido as well as Aomori and Iwate prefectures.”

GBP/USD Price Forecast: Technical outlook
 

GBP/USD retreated from around the 200-day SMA, an indication that sellers are leaning towards that key resistance level. Although momentum remains bullish as depicted by the Relative Strength Index (RSI), buyers must achieve a daily close above 1.3350 to challenge the 1.3400 handle.

On the flip side, if GPBP/USD drops below 1.3300, expect further losses, with traders eyeing the 50-day SMA at 1.3262 ahead of the 20-day SMA at 1.3193.
 

GBP/USD daily chart

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