GBP/USD – 4H.

The British pound was unable to close above the retracement level of 38.2% (1.2501). This is the conclusion I make, based on yesterday's and today's trading of the pound/dollar pair. There were two attempts to close above the 25th figure. The first is an eloquent retreat from the level of 38.2%, the second is a little less clear, but still a retreat, and even with the formation of a bearish divergence in the CCI indicator. Thus, now I expect the pair to fall in the direction of the correction level of 23.6% (1.2293) or the peak of August 27 – 1.2308. Despite the recent upward mood of traders, I now consider it possible to buy the pair not earlier than the close above the correction level of 38.2%.

News background. It was he who helped the pound to win back a tiny part of the positions lost over the past three years, but still very tangible in absolute terms. Today, in the next few hours, the value of inflation for August in the UK will be known. Traders are waiting for the CPI to decline to 1.9% y/y, the core consumer price index is also waiting for a decline to 1.8% y/y, according to forecasts of the UK Office for National Statistics. Together with inflation, the retail price index will be released, which is expected to decline to 2.6%. Thus, until the evening, when Jerome Powell begins to acquaint us with the results of the Fed meeting, traders may remain bearish. However, do not prematurely put an end to inflation in the Kingdom of Great Britain. Perhaps the decline has not yet taken place. However, all the same, I would not carry out new purchases of the pound before closing above the psychological level of $1.25.

It's even somehow unusual to start a review of the pound not with events related to Brexit. However, there is little important information now. Prime Minister Boris Johnson and European Commission President Jean-Claude Juncker met in Luxembourg on Monday. Immediately after its completion, Johnson told the press again that the deal is being worked on and even visible progress. Within hours, EU officials denied Johnson's words that the parties had made any progress in the negotiations. Today, Jean-Claude Juncker himself said that the probability of Brexit "No Deal" is very high, as there is too little time to sign the agreement. Juncker's position is expressed in the hope of the European Union to agree with London, but the reality shows that there is almost no chance of this. "Johnson said he wants to agree, but is also ready to leave without it," – summed up Juncker. Well, the stumbling block in the agreement itself remains the backstop clause, which defines all legal aspects on the border between Ireland and Northern Ireland, which will leave the EU with the UK.

What to expect from the pound/dollar currency pair today?

The pound/dollar pair has performed two rebounds from the retracement level of 38.2% (1.2501). Thus, I expect the quotes to fall on Wednesday, September 18, in the direction of the correction level of 23.6% (1.2293). This option can be prevented by the information background, which will be strong today. Therefore, I recommend that you first understand what inflation will be in Britain, after which it will be relatively easy to trade the GBP/USD pair.

The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.

Forecast for GBP/USD and trading recommendations:

I recommend buying the pair with a target of 1.2668 and a stop-loss order below the level of 1.2501 if a close above the Fibo level of 38.2% is performed.

I recommend selling the pair now with the target of 1.2308, since 2 rebounds from the level of 1.2501 were made and a bearish divergence was formed, with the stop-loss order above the Fibo level of 38.2%.