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The GBP/USD pair is testing the 1.2400 mark for a breakout ahead of the publication of the latest minutes of the Bank of England's monetary policy meeting.

Today at 14:00 (GMT+2), the British regulator is expected to raise the interest rate by 50.0 basis points to 4.0%, and will also advocate further adjustments to the value at a more moderate pace to combat record inflation, which in annual terms by the end of December slowed only slightly to 10.5% from 10.7% a month earlier. According to analysts, in the future, the rate of interest rate increase may fall to 25.0 basis points, and its peak by the summer will be 4.5%, which will help avoid pressure on the UK economy, which is rapidly approaching recession.

If the "hawkish" rhetoric of the Bank of England continues, it will strengthen the pound's position against the USD and act as a catalyst for the breakout of the resistance level of 1.2450, provoking further growth to the area of 1.2650. According to forecasts of the International Monetary Fund (IMF), the country will be the only one among the representatives of the G7, whose economy will shrink by 0.6% in the coming year, and in 2024 the indicators will show only an insignificant recovery, increasing by 0.9% and equaling Japan and Italy, which are at the end of the rating in terms of growth rates. In addition, if in the final press conference of the head of the department, Andrew Bailey investors find hints of a slowdown in inflation and a tightening of monetary incentives, the pound will continue its downward correction to the level of 1.2000.

The long-term trend is upward. The pair cannot break the resistance level of 1.2450 for a long time. Accordingly, there is a risk of a downward correction with a target at 1.2000 or 1.1840. If these strong support levels are reached as part of the correction, it will be possible to consider new purchases with a target at 1.2450.

The mid-term trend is upward. Last week, market participants made an unsuccessful attempt to break the target zone of 1.2471–1.2435. Now the price is trading in a correction, in case of development of which the pair may decline to the key support of the trend of 1.1999–1.1954, after reaching which it is worth considering new purchases with a target at the January maximum of 1.2435.

Resistance levels: 1.2450, 1.2650, 1.2990. | Support levels: 1.2000, 1.1840, 1.1540.