Current trend

The GBP/USD pair is holding at 1.3259 after the publication of the results of the US Federal Reserve's monetary policy meeting.

The 50 basis point cut in the interest rate to 5.00% became a catalyst for the sell-off of the American currency amid the continuing risks of a recession. In turn, Fed Chairman Jerome Powell noted that the national economy is stable, and the labor market is cooling after active growth, but his words could not support the dollar exchange rate, which reached 100.40 in USDX, falling from a maximum of 101.15 and losing 0.74%.

Today at 13:00 (GMT 2) the Bank of England's monetary policy decision will be announced: analysts expect the interest rate to remain at 5.00%. At the same time, the comments of the department's representatives may be "hawkish", which may provide significant support to the pound. For now, investors have at their disposal the August inflation statistics in the UK, published yesterday: the consumer price index (CPI) added 0.3% after ˗0.2% in the previous month, and the indicator remained at 2.2% YoY, while the core index accelerated from 3.3% to 3.6%, however, the market expected 3.5%. The retail price index rose from 0.1% to 0.6% MoM and adjusted from 3.6% to 3.5% YoY.

The long-term trend in the GBP/USD pair remains upward: after reaching a maximum of around 1.3258 in August, the price went into a downward correction, which was stopped at the support level of 1.3005. A new upward impulse began from this mark, within which the August maximum was updated yesterday. If during trading the price consolidates above the resistance level of 1.3258, then the growth will likely continue with a target of 1.3400, and a breakout of this mark will allow the instrument to reach the February 2022 maximum around 1.3630. If the resistance level of 1.3258 is held, then the price will go into a downward correction, the target of which in this case will be the 1.3605 mark, and its breakout will allow us to consider a deeper decline in quotes to the support level of 1.2857.

The medium-term trend is also upward: after reaching target zone 3 (1.3242–1.3211) in August, the GBP/USD pair went into a correction and tried to test the key trend support area around 1.2962–1.2931, but the correction was stopped before the test of the key support level. As a result, the growth continued, and yesterday the August maximum was updated. Today, buyers are trying to consolidate above the target zone 3 and, if successful, the next target will be the target zone 4 (1.3546–1.3515). The key support after updating the August maximum shifts to the levels of 1.2994–1.2963. If the price corrects to this area, there will be an opportunity to consider long positions with targets of 1.3131 and 1.3298.

Support and resistance

Resistance levels: 1.3258, 1.3400, 1.3630.

Support levels: 1.3005, 1.2857, 1.2680.

Trading tips

Long positions can be opened from 1.3005 with a target of 1.3258 and a stop-loss of 1.2925. Implementation period: 9–12 days.

Short positions can be opened below 1.2925 with a target of 1.2680 and a stop-loss of 1.3025.