GBPUSD has formed lower highs and lower lows to trade inside a falling channel on its hourly time frame. Price is testing the resistance and could be due for a move back to the bottom of the channel at the 1.3800 mark from here.

The 100 SMA is above the 200 SMA, though, so the path of least resistance is to the upside. In other words, there’s a chance that resistance might still break. Price is testing the dynamic resistance at the 200 SMA and might still hit a roadblock at the 100 SMA dynamic inflection point.

Stochastic is still heading lower to signal the presence of selling pressure, so price could follow suit. RSI is also heading south without reaching the overbought zone, which suggests that sellers are eager to return.

The upcoming FOMC decision might impact dollar price action strongly in the upcoming sessions, especially if policymakers shift to a more hawkish tone. Fed head Powell has assured that the rise in bond yields is not worrying and that this signals a strong recovery in the US economy.

Hinting that they’re still open to adjusting rates or asset purchases to keep a lid on yields might even be more bullish for the US currency.

There are no major reports due from the UK economy, although sterling has been on strong footing on account of the success of their nation’s vaccination efforts. The main catalyst for the pound would be the BOE decision and MPC minutes coming up later this week, although no actual interest rate changes are eyed as well.

A more optimistic tone from the BOE might be enough to spur a break higher for GBPUSD, especially since the pair is on an uptrend on the longer-term charts.