GBP/USD bulls capitulating below 1.31 handle post FOMC minutes

• GBP/USD is currently trading at 1.3089, within a range of between 1.3045 and 1.3120. 
• GBP/USD pressured following FOMC minutes and awaits EU summit announcements.

The dollar picked up a bid following the FOMC minutes where markets were in anticipation of a potential dovish tone. Instead. they came through with no great shakes or divergence from what the markets had already priced in as follows:

Keynotes from today's FOMC minutes (20 March meeting): 

• Majority saw rates on hold through 2019;
• Several officials noted that rate views could shift either way;
• Majority of policymakers said patience needed;
• Several officials concerned yield curve quite flat;
• Fed noted significant uncertainties around the outlook;
• Uncertainty remained high over Brexit and trade but that risks of adverse outlook had fallen;
• Some said economy could rebound and warrant a rate hike late in the year;
• No officials said expected that a rate cut would be needed this year;
• Time would be needed to assess whether Q1 weakness would spill into Q2;
• Saw less of a boost from fiscal policy than expected;
• Most likely outcome was a sustained expansion.

Eyes remain on Brexit developments and today, markets are awaiting the outcome of PM May's plea for an extension from the EU. PM May is talking to the opposition, (Labour), to try to find a solution to the Brexit impasse while simultaneously asking the EU today at an emergency summit with various options that were laid on the table, one of which being an extension until 30 June until the UK passes a deal. 

Theresa May has now finished making her pitch to her fellow EU leaders, a light one at that, and she is out of the room while the EU27 are deciding what to do next and we awiat possible announcements later today.

Key notes so far:

• UK's PM May addresses EU leaders, requesting article 50 extension until 30 June (Letter to European Council President Donald Tusk enclosed)
• President of the European Parliament presser: Wants greater clarity about the UK’s future relationship with the EU
• EU summit leaders comments ahead of PM May's address to EU leaders (happening now)
• Brexit: PM May refuses to say if she will resign if UK is still in EU after June 30
• GBP/USD Technical Analysis: Cable directionless amidst Brexit chaos
• Draghi speech: Brexit not expected to have much of an impact on real economy

GBP/USD levels

Analysts at Commerzbank have not shifted from their outlook:

"GBP/USD continues to consolidate above the 200 day ma at 1.2974 – this has neutralised our immediate outlook. The erosion of the 20 day ma last week was not sustained and the market is consolidating. Above 1.3217 (25th January high) suggests scope up to the 1.3351/82 resistance. Below the 200 day ma lies the 1.2942 55 week ma and the double Fibo retracement at 1.2900/1.2895, this is pretty solid support that is expected to hold the downside. This guards the recent low at 1.2772. The market recently reached 1.3382 before failing. Should the 55 week ma hold, our overall target remains the 1.3552 200 week ma."