GBP/USD back to 1.40 after FOMC Minutes

• Cable reacts positively to a rather neutral FOMC Minutes.
• Bullish steam stalled at the key 1.40 barrier, where bulls and bears continue to battle for control.

The Pound is gaining ground against the US Dollar, recovering the key psychological 1.40 mark after the Federal Reserve released the minutes of its last monetary policy meeting. A few Fed officials showed concern about the economic outlook, while others highlighted the potential risk for an inflation lag.

The greenback has not digested well the news, being sold across the board, which has pushed Cable slightly above 1.40, just where it started the day. The spike post-FOMC Minutes has seen the pair gaining 50 pips in barely a few minutes, with GBP/USD now having fully recovered from the sell-off during the London session, when it reached an intraday low of 1.3905 after reacting negatively to the UK Employment report.

Technical levels

With the current bullish steam still in place, GBP/USD bulls could take a look at yesterday’s high of  1.4025 as their next target. If that one gets breached, next bullish target might be at 1.4052, this week’s high from early Monday.

On the downside, a USD comeback should target first yesterday’s low of 1.3932, with today’s low of 1.3905 looking like the most important support to break for the bears.