So the day that all market participants were waiting for has come. Today at 19:00 London time, the US Federal Reserve's Open Market Committee will announce its decision on interest rates, publish an accompanying statement, and a press conference of Federal Reserve Chairman Jerome Powell will begin a little later. First of all, investors will be interested in whether the Fed is ready to reduce the quantitative easing (QE) program, and if so, when this reduction will begin. As usual, opinions differ in such situations. Some believe that the signal will be given, and the markets will continue to win it back with purchases of the US dollar. Others believe that the Fed will take a more cautious position.
Among the most important "ifs" will be the subsequent macroeconomic data and the situation with COVID-19, namely, the degree of success of vaccination of the population and opposition to the new delta variant of the insidious infection. In general, I would venture to assume that the Fed's rhetoric will be maintained in a neutral-positive tone. However, whether this will be enough to strengthen the US dollar is a big question. If this is what happens, then such rhetoric will not differ in any way from the previous one, which is already embedded in the value of the US currency. For a confident and stable growth of the US dollar, the Fed should announce the timing of the start of the QE reduction. However, it is unlikely that we will hear such a statement. Everything will most likely be limited to vague phrases that can be perceived and played out in two ways.
Daily
It is gratifying that yesterday's assumptions about the continued growth of the British pound against the US dollar were confirmed. As expected, after a pullback to the resistance of 1.3785 broken the day before, with the probability of the price flying a little lower, the pair resumed growth, which turned out to be quite strong. The black 89-exponential moving average stopped the pair's rise yesterday and was not broken. However, the pound bulls are again storming this exponent, testing its strength. In all likelihood, the pair is aimed at reaching the mark of 1.3900, where the 50th Fibo level passes from the downward movement of 1.4247-1.3570.
Given the volatility of sterling and the importance of today's evening events, if they turn out to be unfavorable for the US dollar, the GBP/USD pair can reach the level of 1.3950, where the 50-simple moving average passes. About reaching the key mark of 1.4000, everything should be bad for the dollar in general. I will once again express my personal opinion that, most likely, the Fed will remain in its previous positions, and if it changes its rhetoric, it will be very insignificant. With a high degree of probability, it can be assumed that officials of the US Central Bank will remain cautious in their statements and comments. If this happens, the US dollar does not expect anything good, and the US currency will likely come under selling pressure. I expect GBP/USD to continue the upward dynamics to the previously indicated prices.
