GBP/USD: testing the 1.2500 level on a weaker dollar post FOMC minutes

Currently, GBP/USD is trading at 1.2495, up 0.45% on the day, having posted a daily high at 1.2500 and low at 1.2423.

GBP/USD remains better bid despite the hawkish FOMC minutes and positive ADP report for the US jobs sector. GBP remains buoyed by the better-than-expected services PMI for March. This data arrived as 55.0, beating the previous 53.3 month on month. We will now wait for more key data form the UK this Friday with manufacturing and industrial production. We also get the trade balance and the NIESR GDP estimate while we await the US nonfarm payrolls data. 

In respect to the FOMC minutes,  participants judged change to reinvestment policy would 'likely be appropriate' later this year, allowing balance sheet to shrink, although the minutes failed to deliver anything concrete in terms of the balance sheet.  Almost all FOMC members see jobs at or near max employment while Fed officials were still divided over how close inflation was to their goal.

US unemployment rate outlook - Nomura

GBP/USD levels

Valeria Bednarik, chief analyst at FXStreet explained that from a technical point of view, the pair maintains a neutral-to-bearish bias:  "The 4 hours chart, the pair was unable to surpass a horizontal 20 SMA around 1.2490, while technical indicators hold within bearish territory, but with no clear directional strength. The same chart shows that the pair bottomed multiple times over the last few days in the 1.2420/30 region, confirming that a break below 1.2410 is required for a downward extension that can extend down to 1.2330."