22.09.202315:15 Forex Analysis & Reviews: GBP/USD dynamics scenarios on September 22, 2023

GBP/USD continues to trade downward, deepening its move after breaking through the key support level of 1.2480 (200 EMA on the daily chart) into the zone of medium-term and long-term bearish markets.

The fresh British macro data released this morning served as another "fly in the ointment" for market participants betting on the pound's strength.

S&P Global Market Intelligence noted that the PMI index data indicating a sharp drop in production volumes corresponds to a GDP contraction of more than -0.4% on a quarterly basis, and the widespread decline is gaining momentum, providing little hope for a quick improvement.

After the Bank of England meeting concluded on Thursday, GBP/USD tested the 1.2232 mark. This is the lowest level since the end of March, and today, GBP/USD approached it again after the publication of British PMI data.

A break below this level could signal further decline for GBP/USD and open up new short positions with targets near local support levels at 1.1920, 1.1900, and 1.1820.

In an alternative scenario, after breaking through the key resistance levels of 1.2480 and 1.2520 (144 EMA on the daily chart), the price will return to the zone of the medium-term bullish market for GBP/USD, and after breaking through the key resistance level of 1.2770 (200 EMA on the weekly chart), it will enter the zone of the long-term bullish market.

The first signal for resuming purchases here could be a rise above the local resistance level of 1.2320, with confirmation being the break of the important short-term resistance level of 1.2390 (200 EMA on the 1-hour chart).

Support levels: 1.2230, 1.2200, 1.2100, 1.2000, 1.1920, 1.1900, 1.1820

Resistance levels: 1.2320, 1.2390, 1.2445, 1.2480, 1.2525, 1.2550, 1.2580, 1.2650, 1.2770, 1.2800, 1.2900, 1.3000, 1.3100, 1.3140, 1.3200