GBP/USD drops to lows ahead of US data, FOMC

The British Pound continues to lose its shine today, now sending GBP/USD to the area of session lows in the 1.2730 region.

GBP/USD now looks to US releases

Cable met fresh sellers in the boundaries of daily highs in levels just shy of 1.2800 the figure earlier in the session, quickly coming down to the current 1.2735/30 band as markets get ready for the release of key US data and the FOMC meeting.

The selling pressure around the Sterling has emerged following disappointing results from UK’s labour market report, where the jobless rate remained unchanged although wage inflation remains unable to gather some serious traction.

Cable’s uptick to the 1.2800 handle appears supported by increasing open interest in the GBP futures market, with traders adding contracts on Tuesday following the inflation-led climb from the 1.2630 region.

Later in the session, the FOMC is expected to raise rates by 25 bp, with the Fed’s balance sheet poised to stay in centre stage.

GBP/USD levels to consider

As of writing the pair is losing 0.18% at 1.2730 and a breakdown of 1.2632 (low Jun.9) would open the door to 1.2625 (100-day sma) and finally 1.2569 (200-day sma). On the upside, the next hurdle lines up at 1.2771 (high Jun.12) followed by 1.2791 (55-day sma) and then 1.2882 (20-day sma).