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GBP/USD rallies to test 1.56 on "No Change" from Fed

FXStreet (Guatemala) - GBP/USD has rally on the back of the Fed's decision to stay as they are while they monitor the labour market for further improvements and until they are reasonably confident that they are back on course to meet their 2% inflation target.

GBP/USD had been building a strong bullish case based upon the UK's bullish economic performance of late, with strong jobs data and an optimistic tone from the BoE's Governor, Carney, which has been making a way towards a possible case for interest rates to be hiked in the foreseeable future.

GBP/USD bulls have a green light

The Fed's decision and key details within the accompanying statement, GBP/USD bulls have been given the go ahead to test the upper end of the 1.55 handle with a target set on the August highs of 1.5615.

FOMC details on statement

The key detail of the statement are that 13 officials want a rate hike 2015, down from 15 officials previously. There needs to be improvement in the labour market and there are concerns of global uncertainties, and essentially, they do not want to jeopardize economic progress by moving too early.

GBP/USD upside levels

Technically, GBP/USD has seen a strong rising trend from 1.5160 in a strong recovery from the end of August's downside from above 1.5800 and penetrated the 200 DMA at 1.5346, the 50 DMA at 1.5423 and is currently trading around the 20 DMA today at 1.5521. Rallies have been probing 1.5540/50 today that have been guarding 1.5615, the August high. The break here to the upside has been capped at 1.5580 in the main, but the high of 1.5606 is just shy of the August high and risks remain with a bullish bias towards the recent highs of 1.5817 in late August.

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