As the week begins, GBP/USD is developing the bearish momentum formed last Friday during Jerome Powell's speech at the Jackson Hole symposium. The pair is testing the level of 1.1650 and is trying to renew the 40-year lows.
The head of the Fed said that it was necessary to continue to tighten the course of the regulator until inflation is fully controlled. Investors who had hoped that the Fed would pause to raise rates suffered a fiasco. The probability of a 75-point monetary tightening in September rose to 60%. Sterling, like other risky assets, reacted to the strengthening dollar by a marked decline.
Additional pressure on the pound was put by a persistent rise in inflation in the UK, the main reason for which was the rise in energy prices. In October, the British will get their energy bills with an 80% surcharge.
GBP/USD Technical analysis
On the daily chart of GBP/USD, the Bollinger Band indicator is steadily turning downward.
MACD indicator is declining in the negative area and holds a strong sell signal.
The oscillator stochastic has just reset from the oversold area and is again testing the 20% level for a break-down.
After a confident breakdown of support at 1.1647, we are intensifying sales towards 1.1531. Stop-loss is placed at 1.1700.
On a rebound from 1.1650, wait for consolidation above 1.1700 and then form long positions, with low volumes, towards 1.1800. Stop-loss is set at 1.1647.