According to economists, the Bank of England will have to go for a much larger increase in rates than previously planned, driving the British economy even deeper into recession, and this does not exclude the fact that British government bonds, and with them the pound quotes, will eventually beat the September anti-records.
A rebound in the GBP/USD pair may occur already near the resistance level of 1.1885, if large buyers of the dollar decide to move its quotes higher, which will also be accompanied by harsh rhetoric from the Fed leadership regarding the prospects for monetary policy.
Below resistance levels 1.1885, 1.2110 GBP/USD remains in the long-term bear market zone, which makes short positions preferable. After the breakdown of support at 1.1885, an additional signal to enter short positions will be a breakdown of the important short-term support level of 1.1803.
Today (at 19:00 GMT) the minutes of the Fed’s November meeting will be published, which may contain additional information regarding the prospects for the US central bank’s monetary policy. It is worth considering this fact very carefully.
*) for important events of this week, see the Most Important Economic Events of the Week 11/21/2022 – 11/27/2022
Support levels: 1.1885, 1.1803, 1.1575, 1.1500, 1.1400, 1.1300, 1.1200, 1.1160, 1.0940
Resistance levels: 1.2000, 1.2110, 1.2250