GBP/USD: bulls back in charge on FOMC minutes

GBP/USD was volatile on the FOMC minutes, but the sell-off in the dollar leaves sterling comfortable on the bid above the midpoint of the 1.30 handle. 

GBP/USD ran into offers at 1.3080, containing the rally that came of a dovish set of minutes and in stark contrast to the Fed's statement that suggested the US economy was turning a corner and that an interest rate hike could be on the cards for September. 

FOMC minutes: Divergence about when to raise rates

However, the market has not been buying the statement that said, "Near term risks to economic outlook have diminished," and the dollar has remained fragile, especially soft on poor US data of late.  The minutes actually showed that voters agreed to wait for more data to gauge the economy while also showing that some Brexit medium and long-term risks exist from abroad. Most notably,  the FOMC were also divided on whether job-gain pace worrisome.

How volatile has GBP/USD been?

On the hourly GBP/USD chart, ATR (14) is presently at 27 pips, while 2-Standard Deviation Volatility Bandwidth is expanding and currently 63 pips. On a daily chart, 2-Standard Deviation Volatility Bandwidth is expanding at 501 pips. Over the past four weeks, 27 pips has been the average movement for the current session. Following the four week period average, today’s most volatile hour was between 8:00-9:00 GMT which has an average movement of 52 pips.

What price levels and patterns have to be considered?

Current price is 1.3061, with resistance ahead at 1.3088 (Daily High), 1.3107 (Daily Classic R1), 1.3109 (Daily 20 SMA), 1.3167 (Weekly Classic R2) and 1.3167 (Daily Classic R2). Next support to the downside can be found at 1.3053 (Yesterday's High), 1.3046 (Daily Open), 1.3046 (Weekly High), 1.3041 (Weekly Classic R1) and 1.3013 (Hourly 20 EMA).  Looking at price patterns, we can see a Piercing Line 4-hour candlestick formation.