GBP/USD rises back above 1.2900 ahead of FOMC minutes as pound recovers

• Pound trims losses across the board amid an improvement in risk sentiment.
• US Dollar mixed ahead of the FOMC minutes due at 18:00 GMT.

The GBP/USD rebounded from the 1.2840 area and tested daily highs at 1.2930, unable to break above. Ahead of the FOMC minutes, it is hovering around 1.2900, up 40 pips for the day.

The pound managed to recover from earlier losses after Brexit concerns following comments from Ireland’s Foreign Minister. The improvement in risk sentiment also helped sterling.

In Wall Street, the Dow Jones and the Nasdaq gains more than 1.50%. The rally in equities weakened the US dollar. The DXY is falling 0.05%, below 93.70. In about 90 minutes, the Federal Reserve will release the minutes of its latest meeting. The impact of the Fed’s document could be limited considering that over the last few days many FOMC members have spoken in public, including Chair Powell.

Technical outlook

Cable found support so far above the 20-day moving average that stands at 1.2855. A daily close clearly below would open the doors to more weakness ahead. The next support stands at 1.2800. On the upside, resistance is seen at 1.2940, followed by the 1.3000 area.