Scenario
Timeframe	Weekly
Recommendation	SELL STOP
Entry Point	1.2365
Take Profit	1.2240
Stop Loss	1.2440
Key Levels	1.2200, 1.2240, 1.2311, 1.2369, 1.2400, 1.2450, 1.2500, 1.2550

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.2450
Take Profit	1.2550
Stop Loss	1.2400
Key Levels	1.2200, 1.2240, 1.2311, 1.2369, 1.2400, 1.2450, 1.2500, 1.2550

Current trend

The GBP/USD pair is trading in different directions, holding close to 1.2375. Activity in the market at the beginning of this week remains low, as investors take a wait-and-see approach ahead of the meetings of the US Federal Reserve and the Bank of England.

The American regulator is currently not expected to take any steps aimed at tightening monetary conditions, while the British regulator is likely to raise the interest rate by another 25 basis points to 5.50% and this could complete the cycle of "hawkish" monetary policy this year. At the same time, before the Bank of England meeting, which will take place on Thursday, macroeconomic statistics on inflation will be published in the UK. The Consumer Price Index may add 0.7% in August after -0.4% in the previous month, and in annual terms, markets expect the indicator to accelerate from 6.8% to 7.1%. The Core Consumer Price Index may adjust from 6.9% to 6.8%, reflecting the reason for the current increase in inflation in the country. Meanwhile, the British public’s trust in the Bank of England’s policy in effectively combating rising prices has reached its lowest level since 1999: about 40.0% of respondents consider the steps to such a rapid increase in the interest rate to be wrong, while only 19.0% gave a satisfactory assessment of the authorities’ actions.

On Wednesday, UK Retail Price Index data will be published. Forecasts suggest an increase of 0.9% after a decline of 0.6% a month earlier, while in annual terms it could be adjusted from 9.0% to 9.3%.

Support and resistance

Bollinger Bands on the daily chart show a steady decline. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic, having reached its lows is reversing into the horizontal plane, indicating risks of oversold pound in the ultra-short term.

Resistance levels: 1.2400, 1.2450, 1.2500, 1.2550.

Support levels: 1.2369, 1.2311, 1.2240, 1.2200.

Trading tips

Short positions may be opened after a breakdown of 1.2369 with the target at 1.2240. Stop-loss — 1.2440. Implementation time: 1-2 days.

A rebound from 1.2369 as from support followed by a breakout of 1.2450 may become a signal for opening new long positions with the target at 1.2550. Stop-loss — 1.2400.