GBP/USD bounces slightly post-FOMC’s minutes

• GBP/USD bounces about 20 pips on FOMC’ minutes. 
• The Federal Reserve Bank says that its sees a rate hike in June. 

GBP/USD is trading at around 1.3362 down 0.72% on Wednesday.

The FOMC’s minutes revealed that a rate hike is likely at the next meeting and allowing a modest "overshoot" on inflation may be good. The Fed also said they are “monitoring the yield curve“ and that “inflation on a 12-month basis is expected to run near the Committee’s symmetric 2% objective over the medium term. Risks to the economic outlook appear roughly balanced.” 

On the broader picture, the greenback has been trading at multi-week highs as market participants anticipate the Federal Reserve Bank to hike at least three to four times in 2018. On the other hand, GBP has been struck by a string of lower-than-expected macroeconomic data that prompted the Bank of England to push back interest rates hikes in the summer or in autumn. 

Earlier the inflation data came below expectations in the UK. In fact, the Core Consumer Price Index year-on-year in April fell short of expectations and decelerated to 2.1% versus 2.2% expected by analysts while the Producer Price Index Input year-on-year in April also came below estimates at 5.3% versus a 5.8% forecast.

GBP/USD technical outlook:

The Cable is trading below its 50, 100 and 200-period simple moving averages on the 4-hour time frame suggesting a strong downward bias. Supports are seen at the 1.3300 handle followed by the 1.3220 swing low.