At the beginning of November, the GBP/USD pair fell sharply amid strong US statistics and a growth in the demand for the USD.
For several months, the demand for the US currency has been fueled by expectations of a hike in the US interest rates. Favorable labour market statistics strengthened these expectations. At the same time, before interest rates are raised, 2% inflation is to be reached. However, CPI remains at the level of 1.9%.
Today, special attention needs to be paid to the publication of FOMC minutes. If the majority of the Committee members favor a rate increase, pressure on the GBP/USD pair would increase.
Support and resistance
This week, the GBP/USD pair has been trading within the range of 50 points, but today the volatility may grow amid the publication of FOMC minutes.
Technical indicators confirm that the downward trend in the pair is likely to get stronger. MACD indicates growing volumes of short positions. The price failed to overcome the middle MA of Bollinger Bands and tends to move down towards the lower one at the level of 1.5030.
Support levels: 1.5190, 1.5100, 1.5030, 1.4910, 1.4830, 1.4745, 1.4650, 1.4570.
Resistance levels: 1.5250, 1.5300, 1.5350, 1.5400, 1.5500, 1.5610, 1.5675, 1.5750.
It is recommended to open short positions at the current level or place pending orders at the levels of 1.5250, 1.5295 with the target at 1.4910 and stop-loss at 1.5370.