GBP/USD adds to daily gains above 1.29 as greenback struggles to find demand

The GBP/USD pair inched higher in the late NA session and reached a fresh session high at 1.2940 as the USD encountered e a mild selling pressure. As of writing, the pair was trading at 1.2938, adding 0.4% on the day. 

The greenback weakness seems to be the main reason behind this late upsurge. The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, slipped to 98.78 and came closer to yesterday's low of 98.73. The move, however, seems to be technical in nature as it hasn't been supported by any recent fundamental developments and it's unlikely to gain momentum at least until tomorrow's construction PMI data from the U.K. Earlier in the day, the pair's bullish move was fueled by the higher than expected manufacturing PMI data from the U.K. 

The main event of Wednesday will be the Fed's interest rate decision and the following monetary policy statement. The CME Group FedWatch Tool suggests that the possibility of a rate hike tomorrow is essentially zero, but the statement may offer some insights about the next policy move and drive the price action.

• CME Group FedWatch shows virtually no chance of a rate hike tomorrow

Technical outlook

The pair would need to clear the 1.2955/60 (Apr. 28 high/Oct. 4 high) area to target 1.30 (psychological level) and 1.3055 (Sept. 28 high). On the downside, supports could be seen at 1.2900 (psychological level), 1.2840 (Apr. 27 low) and finally 1.2760 (Apr. 21 low).