GBP/USD is Trying to Break Through the 1.3960 Resistance
The quotes briefly left their intraday consolidated trading range and updated their daily highs around 1.3930 at the beginning of the European session. The rally lacked an obvious fundamental catalyst, and the pair found it in the announcement of the outcome of the Fed meeting.
The pressure on the pound is likely to be increased by the fact that the European Union has launched legal action against the UK for violating the protocol on Northern Ireland, as well as soft comments by the Governor of the Bank of England, Andrew Bailey. The head of the Central Bank said that the regulator intends to buy bonds at an increased pace, and also expressed caution about the economic recovery. The market took this as an early sign of a possible downward revision of the Central Bank's economic forecast, which could limit any significant increase in the pound before the regulator's meeting today.
Contrary to Bailey's statements, the meeting of the monetary committee of the Bank of England this time is unlikely to be as principled as a month and a half ago. Recall that the Central Bank announced that the interest rate will remain unchanged for at least six months. The pound received solid support from this statement, which led the British currency to its current levels. At the meeting today, it is unlikely that fateful decisions will be announced that will significantly affect the dynamics of the British currency.