GBP/USD losses upside momentum at the start of the key day

• GBP/USD buyers catch a breath awaiting fresh Brexit clues.
• The UK PM’s visit to Germany will be closely observed.
• Traders will also focus on the FOMC minutes for fresh impulse.

While optimism surrounding soft Brexit helped the GBP/USD pair to rise on the previous day, the Cable retraces to 1.2165 amid initial Wednesday morning in Asia.

German Chancellor Angela Merkel’s diplomatic statements ahead of the UK Prime Minister (PM) Boris Johnson’s visit pleased the Cable buyers on Tuesday. The Chancellor remained firm on the EU’s Brexit deal but also said that Irish backstop is a question of the political declaration on future ties, not of the Withdrawal Agreement.

Elsewhere, the Sky News conveys that the British PM Johnson, on the other hand, said that he will enter talks with EU leaders “with a lot of oomph” as differences between the UK and EU’s position over the Withdrawal Agreement remain.

The UK PM will begin his two-day travel to Germany and France respectively today. This will be the first EU visit of Mr. Johnson as the PM and hence will be closely observed considering his Brexit bias and popularity.

Other than the Brexit headlines, markets will also keep a tab on the Federal Open Market Committee (FOMC) minutes. The statement could be particularly observed for hints concerning the catalysts that led the US central bank to the crucial rate cut.

Additionally, mixed news concerning the Fed’s future outlook and trade talk developments with China also fail to offer much of the market momentum.

Technical Analysis

Buyers need to overcome July-end high of 1.2250 in order to aim for mid-July bottom surrounding 1.2382, if not then 1.2100 and the monthly low around 1.2015 can keep gaining sellers’ attention.