General analysis GBPUSD for 21.04.2022

Current Dynamics

The IMF has lowered the forecast for growth in the UK economy. The British economy has the highest inflation rate in the last 30 years and the biggest monthly fuel cost growth in the history of observation.

The International Monetary Fund lowered UK GDP forecast for growth in 2022 to 3.7% compared to January’s forecast of 4.7%. It has also lowered growth in 2023 to 1.2% from 2.3%. As well, the IMF forecasts average inflation in the UK for 2022 at 7.4%.

Worth noting that the current inflation rate in Britain is a record for the last 30 years and is at 7%. According to the Office for National Statistics such inflation arose on the background of record fuel prices. Thus, fuel prices increased by 9.9% in March, which was the largest monthly increase in the history of monitoring. However, March inflation numbers do not reflect an average 54% increase in energy bills, which is because of an energy price cap increase. Against this background, The Office for Budget Responsibility expects an annual U.K. inflation rate no less than 8.7%.

Meanwhile, the biggest British energy providers predict a 50% increase in the amount of electricity bills owed by their customers, along with the possibility of 40% of the British population falling into fuel poverty.

However, it is worth noting that British Prime Minister Boris Johnson will approve mini-NPPs in 2024 as part of a program to phase out fossil fuels. Britain plans to build eight new nuclear reactors.

Meanwhile, UK teachers disagree with the government’s decision to freeze wages and threaten to go on strike.

Today at 18:30(GMT+2) Bank of England Governor Bailey Speaks, later at 19:00(GMT+2) U.S. Fed Chair Powell Speaks.

Tomorrow at 10:30 (GMT+2), the U.K.’s Manufacturing PMI and Services PMI will be released. At the same time, the U.K. Composite PMI for April will also be released. Later in the day, the U.S. Markit Composite Purchasing Managers Index (PMI) and the U.S. Services Purchasing Managers Index (PMI) will be released at 15.45(GMT+2).

Support and resistance levels.

GBP/USD currency pair pushed away from the level of 100 Fibonacci and returned to the level of 76.4 Fibonacci, under which it started to consolidate. The current trend is downward. The RSI oscillator has crossed from bottom to top the 50 level.

• Support levels: 1.2990
• Resistance levels: 1.3300, 1.3225, 1.3143, 1.3107, 1.3062

Trading scenarios

• Short positions may be opened from the current level with target 1.2990 and stop-loss 1.3107. Implementation period: 2-4 days
• Long positions may be opened above the level of 1.3107 with target 1.3180 and stop-loss 1.3062 Implementation period: 2-4 days