Good day, dear traders!
As already specified in today's article on the EUR/USD pair, yesterday's outcome of the two-day US Federal Reserve (Fed) meeting led to strengthening of the US currency within a wide market range. The British pound was affected by this situation. It declined against the US dollar in trading on September 22. However, the pound has a chance to gain today as at 14:00 (Moscow time) we will receive the information about the Bank of England decision on the key interest rate, get acquainted with the minutes of the British regulator and also get the data on the Bank of England decision on the asset purchase program, which currently amounts to 875 billion pounds every month.
I believe we should hardly expect the Bank of England to change its monetary policy. The English regulator is most likely not to change its parameters at the moment. In this regard, much may depend on the comments of the Governor of the Bank of England. If Andrew Bailey's speech is more hawkish, the pound will have a chance to rise and cut the losses suffered the day before. Besides, we should consider the US statistics, which are due from 15:30 Moscow time. All details and forecasts on these and other events can be found in today's economic calendar, but we move on to the technical part of the review.
During yesterday's decline the bears did not manage to drop the pound rate below the important technical level 1.3600, giving chances for a possible recovery. However, as already noted, it will happen only if the Bank of England decision and comments of its head will be positively perceived by market participants. So far, from the technical point of view, the exchange rate hikers do not have an enviable position. They need to close today's trading above the strong and significant level of 1.3700 to make gains.
Besides, we should consider the orange 200 exponential moving average at 1.3721, which may be a strong resistance and push the rate down. The key support for the GBP/USD pair is still at 1.3570. It is reasonable to assume that consolidation above 1.3700 or a true breakdown of the support at 1.3570 may indicate a further direction for the GBP/USD pair. So far, turning to the trading recommendations for the instrument, I think that selling is reasonably to consider after the short-term rally to the price area of 1.3700-1.3750. It is worth buying after the quote decreases in the area of 1.3600-1.3570. In both cases, I advise to train the support of the confirming signals, better the candlestick ones, and only after that to enter the market.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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