GBP/USD was trading down 0.06% at 1.3870 on Wednesday but remained anchored near recent trend highs and a smidge below July 12's monthly high at 1.3912 as markets awaited insights into Fed tapering discussions, which might also clarify the outlook for BoE policy.
Tapering is the first step toward eventually raising U.S. rates and may hold insights into the BoE's normalization plans. Recent comments by some BoE members have pushed the issue forward, even with the resignation of recent hawk Andy Haldane, with more MPC members expected to start voting to reduce the UK asset purchase program from its current GBP 875bn.
The pound, though off 2021 highs by 1.4250, remains up 1.37% versus the dollar, while EUR=EBS has slipped 3.5% and JPY=EBS has gained 6.63%.
A less-dovish lean by the Fed, and Chair Jerome Powell, may validate more taper support from the BoE, which may open the way for sterling bulls to make another run at 2021 highs.
GBP/USD finds resistance at 1.3911, the 50% Fib of 1.4250-1.3573's June-July range above which 100- and 55-DMA resistance looms at 1.3924 and 1.3970, with June 23's 1.4001, the recent trend high, capping.
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