GBP/USD is trading in a narrow price range near 1.2375 on Tuesday. The volatility of currency pairs on the market is low, as the Fed and Bank of England meetings will be held this week.
Investors do not expect the Fed to change the interest rate while the Bank of England may conduct an act of monetary restriction by 25 basis points and raise the rate to 5.5%, completing the cycle of tightening financial conditions. Prior to the publication of the results of the regulator's meeting in the UK, the inflation report will be released. The indicator is expected to rise by 0.7% (m/m) or from 6.8% to 7.1% (y/y) in August. At the same time, core inflation may slow from 6.9% to 6.8%. According to a recent survey, 40% of the population believe the Bank of England's policy of a sharp rate hike is wrong. This is the lowest amount of doubts about the regulator's actions since 1999.
Tomorrow, the UK will release its retail price index. The index is expected to grow by 0.9%.
Technical analysis for GBP/USD
The Bollinger indicator on the Daily remains in a steady decline, as does the MACD indicator, which maintains a strong sell signal. The Stochastic oscillator is flat in the area of minimum values.
If the pair consolidates below the level of 1.2369, we continue to form short positions in the direction of 1.2240. Stop-loss is set at 1.2440.
The transition to buying is possible only in case of price consolidation above the level of 1.2450. The nearest target for buyers will be 1.2550. Stop-loss is set at 1.2400.