GBP/USD pare losses, still in red at 1.3025 ahead of Fed minutes

Following a dip below 1.3000 handle, the GBP/USD pair has managed to recover around 30-pips to currently trade around 1.3025-30 band. 

Despite of an unexpected fall in the number of people claiming unemployment-related benefits during July, the British Pound ran through fresh supply at higher levels, which restricted the pair below session peak level of 1.3070.

The greenback, as measured by the overall US Dollar Index, has reversed part of yesterday's steep declines. However, heading into the key event risk, FOMC meeting minutes, traders might turn cautious and readjust their positions, which might lead to some volatile moves. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, notes, "The 4 hours chart shows that the price is still well above a bullish 20 SMA, currently around 1.2950, while the technical indicators have turned south, but remain above their mid-lines, limiting chances of an upward extension, but not enough to support a bearish breakout."

"If the price accelerates below the 1.3000 figure, then the downward momentum will likely accelerate, with the mentioned 1.2950 being the immediate short term target, en route to 1.2910. The pair needs to settle above 1.3060, to be able to recover some ground, and extend its rally up to the 1.3100 region, where selling interest is expected to surge."