GBP is trading with an uptrend paired with USD in trading this morning session, recovering from a noticeable decline the day before, which was caused by another postponement of the trade deal between the UK and the EU.
The day before, the European Commission President Ursula von der Leyen said that the parties are still facing several disagreements. Still, the signing of a trade agreement is quite possible by the end of this week even though von der Leyen today reportedly told EU leaders that the probability of no-deal is higher than that of a deal
Previous day’s macroeconomic statistics from the UK turned out to be ambiguous, which also partly contributed to the development of a “bearish” trend for the instrument.
UK GDP in October slowed down from +1.1% MoM to +0.4% MoM, apparently responding to repeated restrictive measures, as well as a weak economic recovery after the first wave of lockdowns.
At the same time, Industrial Production in October rose by 1.3% MoM, while analysts expected an increase of only 0.3% MoM. In annual terms, the rate of production decline slowed down from –6.3% YoY to –5.5% YoY.
In the D1 chart, the price range is expanded from below reflecting rise of “bearish” sentiment in the short term.
MACD is going down keeping a fairly stable sell signal (located below the signal line).
Other oscilators like Stochastic also show a similar trend. The indicator reversed into a horizontal plane, responding to the corrective growth of the instrument at the trading today.
Price action wise the price has respected the shor-term support 1.3180. We will be looking at this level as a key level for intra-day trading. Breaking below the support could be a trigger for a shorts down to the next support level 1.3115 level. Only break and close below 1.3115 – 1.3180 zone will be the medium term shorting area.
Resistance levels: 1.3260, 1.3300, 1.3400, 1.3450.
Support levels: 1.3180, 1.3115, 1.3000