GBP/USD is trading in different directions near the 1.3375 level. Statistics from the UK and the USA did not cause significant activity in the market.
Earlier, data on UK GDP for the second quarter were published. Economic growth slowed from 0.9% to 0.7% in annual terms and from 0.6% to 0.5% in quarterly terms. Such low rates may prompt the Bank of England to more aggressively ease monetary policy, especially given the recent decision of the US Federal Reserve in September to cut the interest rate by 50 basis points.
The pound is also under pressure due to a decrease in the retail price index from the Consortium of British Retailers: the indicator fell by 0.6% in September after a previous decrease of 0.3%. Today, the market is awaiting data on business activity in the UK manufacturing sector from S&P Global. The forecast is 51.5 points. Additionally, in an interview with the former head of the Bank of England, Mervyn King, it was noted that high inflation in the country was caused by the belated actions of the regulator, but now the situation is stabilizing.
With the start of trading in the United States, the market will monitor data on the ISM index of business activity in the manufacturing sector, which may rise from 47.2 to 47.5 points in September. Participants also appreciate the recent speech by Fed Chairman Jerome Powell, who confirmed the course of monetary policy easing, but at a slower pace. The Fed rate is expected to decrease by another 50 basis points by the end of the year.
The Bollinger band indicator on the daily chart continues to grow. While the MACD indicator retains a weak sell signal, and the Stochastic indicates overbought and possible decline of the pair.
We will consider short positions with a confident breakdown down to the level of 1.3340. The target is 1.3250. We will set the stop loss at 1.3390.
In case of a breakdown above the 1.3435 mark, we proceed to purchases. The target is 1.3550. We place the stop loss at 1.3380.