We present a medium-term investment review of the GBP/USD pair.

The pound is under pressure from high inflation, hindering the recovery of the national economy. However, the September consumer price index reached 1.7%, entering the Bank of England’s target range with an upper limit of 2.0%, and the core indicator, which does not consider fuel and food prices, decreased from 3.6% to 3.2%. It allows the regulator to adjust the monetary policy, which has been restrictive for a long time. The interest rate is currently 5.00%, and at the November meeting, its reduction may continue. The currency is supported by the August industrial production growth from –0.7% to 0.5% MoM and from –2.2% to –1.6% YoY. It shows significant progress after a long period of stagnation, so, the gross domestic product (GDP) increased by 0.2% after zero dynamics earlier MoM and from 0.9% to 1.0% YoY.

The American dollar has been trading in an upward trend for the second week at 103.00 in USDX. However, its further strengthening is hindered by the proximity of the presidential elections in the United States. Thus, investors are in no hurry to form large positions due to differences in the candidates’ rhetoric. The representative of the Republican Party, Donald Trump, is a supporter of industry and business, while the markets are unsure what measures Kamala Harris and the Democratic Party will take for the country’s economy if elected. In addition, the currency is influenced by monetary factors. According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of an interest rate adjustment by –25 basis points at the US Fed meeting on November 7 is 94.1%, and its effect is priced in already.

Thus, the British economy is currently demonstrating greater stability, and the uncertainty of the dollar’s prospects may cause the upward trend in the GBP/USD pair to continue in the coming quarter.

Technical indicators confirm the likelihood of growth in the trading instrument.

On the weekly chart, the price is moving within an ascending channel with dynamic boundaries of 1.4100–1.3000.

The quotes are moving within an ascending range with dynamic boundaries of 1.3400–1.2400, slightly deviating from the resistance line within the correction.

Let us assess the key levels on the daily chart.

The asset is above the full correction level of 61.8% Fibonacci 1.2730. The correction has entered the stage of a full trend, which reflects the probability of an imminent reversal and continuation of the positive dynamics. In case of reaching the full correction level of 61.8% Fibonacci 1.2730, the upward scenario will be canceled, and it is better to liquidate buy positions. The target zone is around ​​the initial trend level of 61.8% Fibonacci extension 1.3800. After reaching, it is better to fix the profit on open long positions.

Let us assess the entry levels in more detail on the four-hour chart.

Long positions may be opened from 1.3100, and the signal can be received soon after a breakout of the previous week’s high, which provides the necessary confirmation for opening the positions.

Given the average asset’s daily volatility over the last month at an average of 56.1 points, the movement to the target zone around 1.3800 may take approximately 59 trading sessions. However, with a volatility increase, this time may be reduced to 49 trading days.