**GBP/USD Forex Signal Loses Momentum Ahead of FOMC Minutes**
*By Crispus Nyaga (credit: InsuranceNewsNet.com)*
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The GBP/USD exchange rate, often referred to as “the cable,” has come under increased selling pressure, retreating from recent highs as traders turned cautious ahead of the Federal Open Market Committee (FOMC) minutes. The pair, which earlier demonstrated notable upside momentum fueled by dovish expectations for both the Federal Reserve and the Bank of England, saw this rally stall as risk-off sentiment returned. This article presents a detailed analysis of recent GBP/USD price actions, the fundamental and technical factors shaping its outlook, and the immediate impact of anticipated FOMC minutes.
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## Key Highlights
– **GBP/USD loses momentum after recent upswing**
– **FOMC minutes loom large, injecting caution into markets**
– **Mixed UK and US economic signals affect direction**
– **Technical charts point to potential turning points**
– **Traders brace for potential volatility surge**
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## GBP/USD Recent Performance
The British Pound to US Dollar exchange rate experienced a strong upside over the last two weeks. The pound strengthened as market participants speculated that the Bank of England (BoE) would delay interest rate cuts. However, this rally fizzled out as investors reassessed global economic risks and turned their attention to incoming US monetary policy cues.
– **Recent Highs**: The GBP/USD touched levels just above 1.2700—its highest in over two months.
– **Pullback**: The pair retreated to near the 1.2650 area as buyers locked in profits and traders eyed the FOMC.
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## FOMC Minutes: The Main Catalyst
The release of the Federal Open Market Committee’s meeting minutes is shaping up as a pivotal catalyst for forex markets. Investors are eager to parse officials’ discussions to uncover clues about the future trajectory of US interest rates.
**Why the FOMC Minutes Matter:**
– Offer granular insight into policymakers’ thinking.
– Can tilt rate expectations hawkishly or dovishly.
– Often induce volatility in USD pairs like GBP/USD.
**Expectations For This Release:**
– The Fed has left rates unchanged since July 2023.
– Recent US data has been mixed—while inflation is cooling, the labor market remains tight.
– If minutes point to readiness for rate cuts, GBP/USD could benefit. But any indications of hawkishness (delaying cuts) could boost the dollar and weigh on the pound.
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## UK Economic Fundamentals
The pound’s rally over the past month, and its recent stalling, are largely anchored by evolving expectations for UK monetary policy and the broader British economic outlook.
### Key UK Data Points
– **GDP Growth**: The UK avoided recession, with growth ticking up in early 2024. However, momentum remains slow—annual GDP expansion is around 0.6%.
– **Inflation**: Headline inflation fell
Read more on GBP/USD trading.