Important events today:

18:00 UTC: USD – FOMC Interest Rate Decision.

The GBP/USD pair remains defensive near the 1.2840 level. Markets may turn cautious ahead of the Federal Reserve’s (Fed) interest rate decision on Wednesday, followed by the Bank of England’s (BoE) meeting on Thursday.

The Fed is expected to keep interest rates unchanged at its July monetary policy meeting on Wednesday. The U.S. central bank has maintained its key interest rate in the range of 5.25-5.50% since July 2023, marking the longest period of restrictive monetary policy in decades.

Market participants will closely monitor statements from Fed Chairman Jerome Powell for additional clues on future rate movements. Markets expect the Fed to start easing its policy as early as September, as inflation has neared the Fed’s 2% target.

Data released on Tuesday showed that U.S. job openings (JOLTS) decreased to 8.184 million in June from a revised 8.23 million in May, above the market’s expectation of 8.03 million. Meanwhile, the U.S. consumer confidence index rose to 100.3 in July from a revised 97.8 in June. According to the Conference Board, this figure was above the market consensus forecast of 99.7.

As for the British pound, investors continued to anticipate that the Bank of England might cut rates on Thursday, leading to a decline in the GBP against the USD. According to Reuters, there is nearly a 58% probability that the BoE will lower borrowing costs by 25 basis points (bps) to 5%.

Recommendations: Trade predominantly with Sell orders from the current price level.