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18.09.2024 04:47 AM
Forecast for GBP/USD on September 18, 2024

The pound's rapid growth on Monday showed its weakness yesterday, as the price returned to the support level of 1.3141. Naturally, this is a more convenient position to wait for the Federal Reserve's rate decision. Since we expect a rate cut of only 0.25% rather than the 0.50% the markets have priced in, we are waiting for the dollar to strengthen and the pound to fall to 1.3080.

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Following this, the pound may continue its decline after the Bank of England's meeting. Seven members of the committee are expected to vote to keep the current rate at 5.00%, while two will vote in favor of lowering it. Today, the UK will release its August CPI report. The core index is expected to rise from 3.3% y/y to 3.6% y/y, while the overall index is forecast to remain unchanged at 2.2% y/y.

In the Eurozone, the current CPI is 2.6% y/y, and the core CPI is 2.9%, yet the refinancing rate is lower. So, even if the UK data slightly exceeds expectations, it may not impact today's vote on the rate but could significantly soften expectations. As a result, we could see the pound drop to the 1.2994 mark.

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On the four-hour chart, the Marlin oscillator is on the verge of entering the downtrend territory. The price remains above the 1.3141 level and the MACD line (1.3116), indicating a wait-and-see mode.

Laurie Bailey,
Analytical expert of InstaForex
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