After an unsuccessful attempt to break through the resistance level of 1.2262, the GBP/USD pair fell to the level of 1.2020 and is now preparing to continue its downtrend against the background of increasing inflationary pressure in the UK.
Data on the Consumer Price Index were published the day before, which in annual terms amounted to 10.1% against the projected 9.8%, and in monthly terms it amounted to 0.6%, while market expectations were at the level of 0.4%. Thus, despite the aggressive increase in interest rates by the Bank of England, officials have not yet been able to contain inflation. Probably, at the next meeting of the regulator, scheduled for September 15, the value will be adjusted again, but the effectiveness of this measure remains in question.
The long-term trend is downward. Yesterday, market participants attempted to break through the support level of 1.2020, but failed to do so the first time. If successful, the decline in quotes of the trading instrument will continue with the target at the July low of 1.1768.
The medium-term trend is upward. The growth target is the zone of 1.2448–1.2415; however, as part of the correction, the quotes may test the key trend support at 1.1932–1.1896, after which traders should consider long positions with the first target at last week's high at 1.2270.
Resistance levels: 1.2262, 1.2655. | Support levels: 1.2020, 1.1768.