GBP/USD continues to recover on Monday, approaching the key resistance of 1.1700.
Today the UK releases July GDP data. Growth of 0.5% is expected according to the forecasts. Also today there will be reports on industrial production dynamics and preliminary inflation data for August. Tomorrow there will be a British labor market report. On Wednesday is the inflation data which is very important for the Bank of England as it will allow the regulator to determine the future course of monetary policy. Analysts expect the figure to set a new record of 10.2%, which will require the central bank to further tighten monetary policy despite the high risks of a deep recession.
Last week, Liz Truss announced measures to support the population in the energy crisis. To help households, the UK government has allocated about £90 billion and set a limit on bills above £2.5 thousand per year. These measures are expected to reduce annual inflation by 5.0%.
The Bollinger Band indicator on the daily formation chart is starting to turn from a downward slope to a horizontal plane.
The MACD histogram remains in the negative range, but is rapidly rising towards the zero line. The indicator has generated a strong buy signal.
Stochastic oscillator is steadily growing and in the near future it will start to test the breakdown level of 80%.
A price fixing above 1.1647 will be a signal to enter long positions with take profit at 1.1759. A protective stop loss is set at 1.1600.
On the decline below the support level of 1.1600, we consider short positions towards 1.1442. Stop-loss is set at 1.1700.