GBP/USD rises toward 1.2500 after FOMC minutes

The US dollar weakened in the market following the release of the FOMC minutes. GBP/USD initially dropped to 1.2450 but then bounced to the upside, moving toward daily highs. The pair is trading at 1.2485, holding a bullish tone. It remains near the daily high located at 1.2495. 

Cable found support today again at the 20-day moving average and bounced to the upside. It is consolidating gains, erasing yesterday’s losses. 

Data and minutes, then NFP

In the UK, the Markit PMI services in March rose to 55.0 from 53.3. The number boosted the pound during the European session. 

Economic data from the US showed mix number. The ADP Private sector employment report showed a gain of 263K in March, beating the consensus of 187K; on the negative front, February's figure was revised lower to 245K from 298K. The ISM Non-manufacturing missed initial estimates in March, coming in at 55.2 against 57.0 of the previous month. 

US: ISM Non-Manufacturing signals activity cooled in March - Wells Fargo

According to the minutes, most FOMC members judged that a change to the reinvestment policy would 'likely be appropriate' later this year, allowing balance sheet to shrink. They agreed that changes should be communicated well in advance. 

FOMC minutes: Fed participants 'generally preferred' to change reinvestment of both treasury and mortgage-backed securities

Now attention turns to Friday’s US official employment report. Market consensus point to a an increase in NFP of 180K and for the unemployment rate to remain unchanged at 4.7%. 

GBP/USD Technical levels 

To the upside, resistance levels might be located at 1.2495 (daily high), 1.2530 (Mar 23 high) and 1.2555 (Mar 31 / Apr 3 high). On the opposite direction, support could be seen at 1.2445/50 (American session low / Asian session high), 1.2415/20 (Apr 4 low) and 1.2400 (psychological / Mar 30 low).