General analysis GBPUSD for 24.09.2021

Current Dynamics

GBPUSD strengthened on Thursday amid weak data on employment and business activity in the U.S. Earlier when announcing the economic outlook the Fed said it was ready for a short-term negative trend at the US labor market. The drop in business activity in September from 55.4 to 54.5 basis points is not critical and indicates that the economy is recovering. The decrease in the U.S. GDP forecast for 2021 from 6.9% to 6% is just a slowdown, not a recession. In any case, 6% is higher than the projected global economic growth of +5.7%, which confirms the exceptional influence of the U.S. on the global market. The Fed continues to follow its plans and despite the current decline, the U.S. currency has a high growth potential in the medium and long term. In addition, it is worth noting the growth of ten-year bond yields by 1.44%, while the abandonment of safe haven assets by investors is clearly temporary in nature.

At the same time yesterday the Bank of England monetary policy meeting was held. The surprise to investors was the announcement that UK inflation could rise above 4% in the second quarter of 2022. This signals that rates on securities with a buy-back option will rise faster, which is positive for the British pound.

Today at 16:00 (GMT+2) Fed chief Jerome Powell is expected to speak. Given the official's previous hawkish rhetoric, the U.S. dollar will receive all-round support from the speech. At the same time the statistics on new home sales in the USA will be published.

Support and resistance levels

On the 4-hour chart, the instrument is correcting ​at the top of the Bollinger Bands. The indicator is directed upward and the price range has widened, indicating continued growth after the correction. Histogram MACD is consolidated in neutral area, no signal to enter the market has been formed. Stochastic has left the overbought area and holds a sell signal.

• Support levels: 1.3515, 1.3570, 1.3595, 1.3680.
• Resistance levels: 1.3725, 1.3755, 1.3805, 1.3860, 1.3900.

Trading scenarios

• Short positions should be opened at the current price with a target of 1.3610 and a stop-loss at 1.3760. Implementation period: 1-2 days.
• It is possible to open long positions above the level of 1.3760 with a target of 1.3850 and a stop-loss at the level of 1.3690. Implementation period: 1-3 days.