GBP/USD headed back to session low at 1.3120

The GBP/USD pair faded a bullish spike to 1.3164 but has held on to modest weekly gap-up gains to currently trade above session low near 1.3120 region. 

In absence of any economic releases from the US and UK, the pair remained confined within a broad trading range and is being driven by sentiment surrounding the greenback ahead of the outcome of this week's FOMC monetary policy meeting on Wednesday.

Although, the Federal Reserve is not expected to announce any change to its current monetary policy stance but market participants will be keen to know if the incoming upbeat US economic data would make the central bank comfortable to announce a rate-hike later during this year. Currently the CME group's Fed Fund futures are pricing-in less-than 40% probability of such an action in December.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "the pair has made little progress so far today, developing below a horizontal 20 SMA and with the technical indicators hovering within negative territory, with no certain directional strength, in the 4 hours chart."

"In the short term, the daily low stands at 1.3112, now the immediate support, with a break below it opening doors for a test of the 1.3060 region, en route to 1.3000."

"The daily high converges with the 20 SMA, meaning some upward extension beyond 1.3165 is required to see further intraday gains, up to the 1.3220/40 price zone."