Current trend

The GBP/USD pair is falling, trading at 1.3044 amid a strengthening US currency and contradictory British macroeconomic statistics.

Thus, the August UK gross domestic product (GDP) increased from 0.0% to 0.2% MoM and from 0.9% to 1.0% YoY, less than the forecast of 1.4% taken into account in the quotes. The industrial production indicator changed by 0.5% MoM relative to the estimates of 0.2% and from –2.2% to –1.6% YoY against –0.5%. Today, the labor market report was released, showing a decrease in the unemployment rate from 4.1% to 4.0% due to a change in employment from 165.0K to 373.0K.

The American dollar is trading above last week’s highs at 103.00 in the USDX after yesterday’s speech by the US Fed Board member Christopher Waller. He explained why the regulator should slow the pace of monetary easing. According to the official, the labor market and economic growth indicators are significantly ahead of forecasts, and there is no need for another interest rate adjustment by –50 basis points. However, it was more effective to change the cost of borrowing by –25 basis points and assess the impact of the measures taken in the long term.

Support and resistance

On the daily chart, the trading instrument is correcting, approaching the support line of the ascending channel 1.3450–1.3000. Technical indicators have given a sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram is forming correction bars, falling into the sell zone.

Resistance levels: 1.3110, 1.3320.

Support levels: 1.3000, 1.2850.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.3000, with the target at 1.2850. Stop loss is 1.3080. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.3110, with the target at 1.3320. Stop loss is 1.3050.