GBP/USD is developing a downward dynamic with the potential to update record lows. The pair has broken through the support of 1.1200 and will try to consolidate below this level.
The dollar is in high demand on forex, especially after the Fed's decision to raise the rate by 75 basis points for the third time in a row. The Bank of England also implemented a 50 basis points monetary tightening the day before, but it was clearly not enough to keep sterling afloat.
Moreover, the British regulator revised its economic forecast and noted that the third quarter could start a recession into recession. Inflation is expected to rise to 11.0% in October.
The Fed revised its neutral rate expectations to 4.6%. This means that monetary tightening will continue this year. Experts predict that the rate will reach 5.0% next year.
GBP/USD Technical analysis
Bollinger Bands indicator on the daily period chart is directed towards a moderate decline.
The MACD indicator is declining in the negative range and holds a solid sell signal.
Oscillator stochastic demonstrates a slight decline in the area of minimum values.
If the pair fixes below 1.1210, we open sales with a target at 1.1060. Stop-loss is set at 1.1300.
A rebound from 1.1210 may be followed by a reversal and break-down with prices consolidating above 1.1300. In this case buying with the nearest target at 1.1478 is allowed. Protective stop is placed at 1.1210.
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