General analysis GBPUSD for 11.11.2021

Current Dynamics

On Wednesday the pair GBP/USD updated annual lows and currently continues to move within the downtrend. The dollar got a significant medium-term support after the release of consumer price data for October. Investors are now counting on a forced tightening of monetary policy by the Fed.

According to the Labor Department report, consumer prices rose 6.2% and core inflation reached 4.6%. Both indicators exceeded thirty-year highs. At the moment, the chance of the first key rate hike in June is estimated at 64%. The possibility of three rounds of monetary policy tightening is estimated at 50%.

Additional pressure on the pound was given by the weak statistics from the UK published today. GDP growth slowed to 1.3% in the third quarter, which led to a reduction of growth to 6.6% on an annualized basis. In addition industrial production slowed to 0.1% in September and the trade deficit narrowed but missed the forecast.

No significant publications from either side are expected today. Tomorrow at 17:00 (GMT+2), U.S. labor market data is expected to be released.

Support and resistance levels

On the 4-hour chart we can see the correction of the downtrend. The instrument is consolidating near the lower Bollinger band, which is the key support level. The indicator is directed downward and the price range has widened considerably, which indicates that the pair is falling further. MACD histogram is holding a strong sell signal. Stochastic is leaving the oversold area, forming a buy signal.

• Support levels: 1.3300, 1.3335, 1.3370.
• Resistance levels: 1.3425, 1.3460, 1.3510, 1.3560, 1.3600, 1.3645.
  
  

Trading scenarios

• Short positions should be opened at the current price with a target of 1.3335 and a stop-loss at 1.3470. Implementation period: 2-3 days.
• Long positions can be opened above the level of 1.3480 with a target of 1.3560 and a stop-loss at the level of 1.3445. Implementation period: 2-3 days.