Is GBP/USD Getting Ready for the Fed?

We are observing a strengthening of the British pound (GBP) against the US dollar (USD) just hours before the Fed's interest rate announcement. The market has broken a significant swing high at the 1.241 level and is heading towards a supply zone at the 1.24200 level. This zone is within a resistance/support area on the H4 timeframe ranging from 1.243 to 1.25, where we find another supply zone at the 1.248 level. Therefore, my prediction is to look for a short position, as despite the market appearing to be on an upward trend, everything indicates a downward entry opportunity. However, I caution that the structure is bullish, and my market entry will only be if, during the pre-opening of New York, the market remains at these levels and if there is a structural breakdown on the M15 timeframe to the downside with a Bullish Flag pattern, indicating an entry zone at M15.

The near-term technical outlook indicates a bearish bias, with GBP/USD trading within a descending regression channel, and the Relative Strength Index (RSI) on the four-hour chart staying well below 50.

On the downside, the first support is at 1.2350 (static level, mid-point of the descending channel) followed by 1.2300 (lower limit of the descending channel, static level) and 1.2240 (static level from March).

If GBP/USD rises above 1.2400 (20-period Simple Moving Average - SMA, upper limit of the descending channel) and starts using that level as support, buyers may show interest. In that scenario, the next recovery targets could be seen at 1.2450 (static level, 50-period SMA) and 1.2500 (psychological level, static level).

Let me know your thoughts, and happy trading to everyone!
Nicola, CEO Forex48 Trading Academy.