GBP/USD. Analysis and Forecast

[Redator]

Today, Friday, the GBP/USD pair continues to draw buying interest for the third straight session, gradually moving away from the lowest level since early August — reached earlier this week in the 1.3250–1.3245 level. This comes against the backdrop of a broadly weaker US dollar.

Recent disappointing UK employment data have reinforced expectations of a gradual reduction in interest rates by the Bank of England. These factors, along with doubts about the country's fiscal policy ahead of the autumn budget in November, are limiting the pound's active appreciation against the US dollar.

From a technical standpoint, the breakout above the 100-period Simple Moving Average (SMA) on the 4-hour chart and the subsequent move beyond the supply zone around 1.3420–1.3425 are favorable for the bulls. Moreover, the oscillators on the 4-hour chart are positive, confirming the prospects for further GBP/USD gains.

Therefore, a continued rise toward the 200-period SMA on the 4-hour chart, located near 1.3465, and the next level above it at 1.3484, appears quite likely.

Beyond that, the psychological level of 1.3500 will serve as a new trigger for the bulls, enabling GBP/USD to extend its advance toward the next significant resistance levels at 1.3535 and 1.3550.

On the other hand, any corrective decline should find solid support near the round level of 1.3400. Further pullback could be seen as a buying opportunity around 1.3370, where the 50-period SMA lies. A drop below this level could accelerate the pair's fall toward the 1.3300 round level. The downward trajectory might then extend toward the October low in the 1.3250–1.3245 level, reached on Tuesday.

The material has been provided by InstaForex Company - www.instaforex.com