GBP/USD pair is trading at around 1.1474, just around the area 2/8 Murray and showing a slight recovery after reaching a low in the Asian session at 1.1450.
Yesterday in the American session, the dollar index strengthened putting downward pressure on the GBP/USD pair. Retail sales data rose 0.3%. This reinforces the view that the Federal Reserve will continue to tighten monetary policy aggressively.
On the other hand, the BoE is expected to raise its interest rate by 0.50% on September 22, but investors believe that the bank could surprise with a rise of 0.75% due to the growing risk of recession.
GBP/USD is currently trading around the area of 1.1470-1.1450 and is moving away from the lowest level since 1985, reached last week at 1.1404.
In the 4-hour chart, we can see the formation of a symmetrical triangle. The British pound is likely to continue trading within this pattern in the next few hours.
A sharp break above the symmetrical triangle pattern and a daily close above 2/8 Murray located at around 1.1480 could be a clear signal to buy, with targets at 1.1560 (21 SMA). The price could even hit strong resistance of 3/8 Murray at 1.1596.
Conversely, if the British Pound trades below 2/8 Murray and breaks the low of 1.1450, it will be a signal to continue selling with targets at 1.1404 and 1/8 Murray at 1.1352.
Technically, if the GBP/USD pair settles below the psychological level of 1.1500, it could accelerate the decline towards the 1.1400 area.
On the other hand, the high reached on September 14 at 1.1588 has become an immediate barrier. If GBP/USD trades above 3/8 Murray (1.1596), this could trigger a bullish rally towards the resistance of 4/8 Murray at 1.1718.