On Thursday GBP/USD is successfully developing a downward movement. Having broken through the support at 1.1300 the pair keeps the "bearish" potential waiting for the release of the results of the Bank of England meeting.
Yesterday came the British Retail Prices Index, which showed a growth of 6.6% in October while the forecast was 5.5%. Economists believe that the rapid rise in prices is due to the energy crisis with an acute shortage of skilled labor in the country. This is forcing employers to raise wages, further accelerating inflation.
The Bank of England is expected to raise rates by 75 basis points at today's meeting. However, this move by the regulator will push the U.K. economy into recession, so the central bank may implement a 50 basis points restriction. If this scenario comes true, the pressure on sterling will increase.
The US dollar, on the other hand, felt even stronger after yesterday's Fed meeting. The Fed predictably raised the rate by 0.75%, but Jerome Powell noted the need for further tightening of monetary policy, saying that the rate targets outlined earlier were clearly undervalued. The Fed chief's words raised the possibility of a 75 basis point rate hike in December.
Considering the fundamental analysis, candlestick patterns and graphical models, we believe that the GBP/USD will continue its downtrend towards 1.1000 and propose to place the order
Sell-limit 1.1350 take-profit 1.1000 stop-loss 1.1450
More about GBP/USD trading
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