GBPUSD – post-Fed bearish continuation is likely scenario, but traders remain cautious

Cable is trading in a very quiet mode in early Wednesday, ahead of key event of the day – FOMC rate decision.
The pair is holding at the lower side of the near-term consolidation range, which extends into fifth consecutive day.
Overall structure remains negative, although the action struggles at key Fibo support at 1.2494 (Fibo 61.8% of 1.1409/1.4249) after a massive drop in April cracked support but failed to register a monthly close below this level.
Daily studies give initial signal of possible bounce as 14-d momentum reverses deeply in negative territory and RSI is oversold, however more evidence is needed to signal rebound.
Falling 10DMA (1.2625) reinforces the upper boundary on near-term consolidation range and marks initial resistance, violation of which would ease downside pressure, with extension through pivotal 1.2750/1.2800 resistances (Fibo 38.2% of 1.3298/1.2411 bear-leg / daily Kijun-sen) to confirm the pattern.
The US Federal Reserve ends two-day policy meeting today, with wide expectations for a 50 basis points hike and start of reductions of its $9 trillion balance sheet, in central bank’s attempts to put high inflation under control, after the Fed started its current cycle of policy tightening in mid-March.
Recent hawkish comments from Fed’s policymakers reinforced expectations for central bank’s aggressive stance in the coming months that strongly inflated dollar recently, but markets will look for a confirmation on tonight’s comments from Fed’s chief Jerome Powell.
Although majority of market observers bet for a 0.5% rate raise, some analysts think the Fed might opt for more aggressive action today on 0.75% hike that would further inflate dollar and send sterling below the recent 21-month low at 1.2411, towards June 2020 higher low at 1.2251.
On the other side, many traders think that 0.5% hike has been priced in and stretched dollar index is facing headwinds from key longer-term barriers at 103.80 (peaks of 2017/2020/2022), signaling good selling opportunity, unless the Fed raises rate more than expected, or Powell’s comments will be less hawkish than expected.

Res: 1.2625; 1.2723; 1.2750; 1.2797
Sup: 1.2466; 1.2411; 1.2359; 1.2251