GBP/USD off session low but still below 1.3100, awaits Fed decision

Despite of better-than-expected UK GDP print, the GBP/USD pair dropped to 1.0370 region but has managed to recover most of the lost ground and is now trading back around 1.3100 handle. 

The British Pound ignored upbeat growth figures for the second quarter of 2016 as investors remained worried over the economic fallout after last month's historic Brexit referendum. The preliminary GDP release estimated the UK economy growth for second quarter of 2016 at 0.6% as compared to 0.5% expected and 0.4% recorded in the previous quarter. 

Moreover, traders also seemed reluctant in betting against the US Dollar ahead of the crucial FOMC statement, which might provide some hints over the timing of next Fed rate-hike decision. In the meantime, monthly releases of US durable goods orders and pending home sales data are likely to be overshadowed by Fed meeting but might still provide some immediate trading opportunities for short-term traders.

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Even from technical perspective, the pair has been confined within a 100-pip trading range since the beginning of this week. Hence, today's FOMC announcement could turn out to be the next big trigger that might assist traders to determine the near-term direction of the pair. 

Technical levels to watch

On the immediate downside, a convincing break below 1.3050 support is likely to turn the pair vulnerable to break below 1.3000 psychological mark and head towards testing its next major support near 1.2860-50 zone with 1.2900 round figure mark acting as intermediate support.

Meanwhile on the upside, the pair remains capped 1.3160-70 strong resistance, above which the pair could immediately rise to 1.3220 resistance before heading towards its next major resistance near 1.3320 area.