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GBP/USD holding below the flat line ahead of BOE minutes and FOMC fun

FXstreet.com (Barcelona) - GBP/USD traders will be focused Wednesday on central bank news flow out of both England and the US.

GBP/USD traders will have plenty of news and data to digest Wednesday

The GBP/USD treaded water Tuesday on lighter-than-expected inflation data out of Britain and lower-than-expected inflation data out of the US later in the day.

Traders and analysts who play in the GBP/USD arena will begin their big day at 08:30 GMT when the Bank of England’s policy meeting minutes are scheduled to be released. Then at 12:30 GMT, US building permits and housing starts data are due out. Last but certainly not least, the FOMC rate decision, commentary and announcement regarding their tapering plans will be released at 18:00 GMT.

Technical outlook for GBP/USD

Technicians say the GBP/USD may be in the early stages of a modest correction. Tim Thielen, CMT and author of the Sea Change Report, noted in his most recent report for FX Street that GBP/USD may have just completed a wave ((iii)) higher just below 1.6000 and that a wave ((iv)) pullback could, based on Fibonacci retracement lines, pull back to 1.5384 from around 1.5900 currently. However, the higher likelihood support level will be at 1.54943 (the 50% retrace of the wave ((iii)) rally).

Session Recap: Specially quiet in Asia ahead of FOMC; Gold below $1300

The USD moved marginally higher across the board during the Asian trading hours ahead of the key risk event of this triple witching week in the form of FOMC at 18:00 GMT, leaving EUR/USD exchange rate at 1.3355 while Cable at 1.5904.
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EUR/GBP battling to recover the 0.84 handle ahead of BoE

The EUR/GBP foreign exchange cross rate is last trading at 0.8399 strongly capped below the round 0.8400 ahead of key BoE minutes at 08:30 GMT.
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