Recently, the US dollar has again begun to be in demand among investors, which is not at all surprising. The main reason for this strengthening was the publication of the July minutes of the Open Market Committee( FOMC). It follows that the leaders of the US Federal Reserve System (FRS) do not rule out the beginning of a reduction in bond purchases this year. Such "hawkish" rhetoric was unexpected for many, which led to even more large-scale purchases of the US currency.

The Bank of England takes a more cautious and soft position in its monetary policy. It is mainly due to the slowdown in inflation and the labor market, the main tests for which will begin after the end of the vacation program, which the government was forced to introduce due to COVID-19. As for the beginning of an increase in interest rates in the UK, under favorable conditions, the first increase will not occur until mid-2023. At the same time, favorable conditions will depend on positive macroeconomic statistics, the inflationary component, and the situation with the COVID-19 pandemic. Judging by today's retail sales report, the economic recovery is still far from complete. In annual and monthly terms, retail sales in the UK were weaker than economists' expectations, especially for the annual indicator, which increased by only 2.4%. Well, now it's time to look at the price charts of the GBP/USD currency pair.

Daily

As we can see, at yesterday's trading, the pair collapsed, breaking through the orange 200 exponential moving average. It happened after the pound bulls failed to raise the exchange rate above the important technical level of 1.3800 a day earlier. Today, the decline continues, and the pair has already fallen to another significant mark of 1.3600, from which it is trying to rebound at the end of the article. If the bears still push through 1.3600, the key support level of 1.3570 will be in focus, where the minimum trading values were shown on July 20 and from where the pair bounced to 1.3980. Most likely, another test of the support level of 1.3570 will end with its breakdown, after which the pressure on the British currency will increase even more. In the current conditions, the implementation of the ascending scenario is under such a huge and fat question that it makes no sense to describe even the possible options so far.

H1

As you can see, on the hourly chart, the pair is trading in a pronounced downward trend. All the used moving averages have been broken, a rollback to the nearest of which (50 simple moving averages) can be used to open short positions on GBP/USD. However, given the level of 23.6 on the Fibonacci grid, stretched for a decline of 1.3877-1.3608, the zone for potential sales looks like 1.3665-1.3690.