General analysis GBPUSD for 01.10.2021
Current Dynamics
U.S. stock indices suffered significant losses in September, which cemented the dollar's status as a safe-haven asset. The GBPUSD pair is trading near yearly lows, and the current moderate recovery is probably part of a downtrend correction.
Yesterday the trading instrument slightly strengthened on the background of the publication of the positive data on the UK GDP. In addition, a short-term pressure on the dollar was put by the increase in initial claims for unemployment benefits. For the withdrawal of monetary stimulus, the FRS needs full employment and high inflation. Only in these conditions the regulator can cut QE in the most productive way for the economy and raise the key rate in 2022.
At the same time, business activity in the UK industrial sector increased in September. There are recurrent downturns in the economy, triggered by COVID-19. The labor market has negative trends, economic recovery is slow and price pressures are growing. All of this points to possible stagflation, which negatively affects the pound.
Today at 14:30 (GMT+2), the U.S. Personal Consumption Expenditures Index is expected to be released. At 16:00 (GMT+2), the U.S. manufacturing activity will be released.
Support and resistance levels
On the 4-hour chart, the instrument is testing the Bollinger Bands Moving Average, which is the key resistance level. The indicator is directed downward and the price range remains wide, indicating that the current trend continues. The MACD histogram is saving a strong sell signal. Stochastic is approaching the overbought area, a strong sell signal is expected during the day.
Support levels: 1.3410, 1.3465, 1.3490.
Resistance levels: 1.3520, 1.3570, 1.3605, 1.3680, 1.3725, 1.3760, 1.3805.
Trading scenarios
Short positions should be opened at the current price with a target of 1.3400 and a stop-loss at 1.3565. Implementation period: 1 day.
Long positions can be opened above the level of 1.3560 with a target of 1.3660 and a stop-loss at the level of 1.3525. Implementation period: 1-2 days.