Current trend

The GBP/USD pair is trading with negative dynamics, developing the "bearish" momentum of recent days. The instrument is again testing the level of 1.2280, located not far from the record lows of March, updated the day before.

Noticeable pressure on the position of the pound was exerted by the results of the meeting of the Bank of England, where, contrary to expectations, with a minimal majority of votes it was decided to leave the interest rate at 5.25%. Five members of the Monetary Policy Committee were in favor of maintaining the previous value, and four were against it. The follow-up statement notes that the regulator expects a further decline in inflationary pressure, which will be supported by a correction in energy and food prices.

It is likely that the Bank of England's decision was significantly influenced by consumer inflation data published the day before: in August, the Consumer Price Index slowed from 6.8% to 6.7%, contrary to expectations at 7.1%, and the core indicator went down from 6.9% to 6.2%, while analysts expected 6.8%. It is worth noting that the British regulator also revised its forecasts for the growth of the national economy. In particular, based on the results of the third quarter, the Bank expects an increase in Gross Domestic Product (GDP) of only 0.1%, which is noticeably lower than the previous estimate of 0.4%.

The market's focus today will be September statistics on business activity in the US and UK. Experts assume that the US Manufacturing PMI will adjust from 47.9 points to 48.0 points, and the Services PMI will correct from 50.5 points to 50.6 points.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is slightly expanded from below, failing to keep up with the development of the "bearish" trend in the short term. MACD is falling, keeping a relatively strong sell signal (the histogram is below the signal line). Stochastic, on the contrary, maintains an uncertain upward trend, retreating from the lows that signal the risks of the pound being oversold in the ultra-short term.

Resistance levels: 1.2300, 1.2350, 1.2400, 1.2450.

Support levels: 1.2240, 1.2200, 1.2150, 1.2100.

Trading tips

Short positions may be opened after a breakdown of 1.2240 with the target at 1.2150. Stop-loss — 1.2300. Implementation time: 2-3 days.

A rebound from 1.2240 as from support followed by a breakout of 1.2300 may become a signal for opening new long positions with the target at 1.2400. Stop-loss — 1.2240.