The pound did not move yesterday, in contrast to the single European currency, which continues its non-stop decline. In general, this is not surprising, since the macroeconomic calendar was completely empty. Moreover, there was a certain break on the political front too. So there was simply no reason for any movements.
Today, so much macroeconomic data are published across the UK that even the eyes are already running wide. So, the November trade surplus of 4.0 billion pounds in December should be replaced by a deficit of 2.6 billion pounds. Of course, this is a negative factor, but we are talking about the most insignificant indicator today. At the same time, orders in the construction sector have a slightly higher weight, the recession rate of which should slow down from -6.8% to -3.6%, and this will fully compensate for the trade deficit. In addition, a slowdown is expected from -1.6% to -1.0% of the decline in industrial production, which is also a relatively positive factor. However, all this against the backdrop of GDP data, although preliminary. Moreover, they should show a further slowdown in economic growth. This time, from 1.1% to 0.9%. Moreover, if these forecasts are confirmed, it turns out that the UK economy has been slowing down for the third quarter in a row, and the growth rate is steadily tending to zero. This is an extremely alarming call. And in general, the decline in it still continues despite the expected improvement in the situation in industry. In other words, the general nature of the data is obviously negative. Thus, if the forecasts are confirmed, then the pound will follow yesterday's example of the single European currency.
GDP growth rate (UK):
In terms of technical analysis, we see a local slowdown, after a significant inertial movement. In fact, the coordinates of 1.2885, which reflects the average between the levels of 1.2770 / 1.3000, served as a periodic support, slowing down the move and forming a pullback as a fact, with subsequent stagnation above it.
Considering the trading chart in general terms, we see an attempt to change the tact of the medium-term upward trend, where the control values of 1.3000 and 1.2900 have already been broken, and the subsequent fluctuation signals a price fix, with a transition to a new range.
It is likely to assume that having a consolidation of 1.2906 / 1.2921 will already be broken through, where we will see a local surge in activity, which may not lead to any changes in tact. It is worth considering that there is now a consolidation process, where a rollback to 1.2980-1.3000 is not ruled out. At the same time, the main positions are considered in a downward direction, but already in case of price fixing lower than 1.2870.
Concretizing all of the above into trading signals:
- Long positions are considered in case of price fixing higher than 1.2960, with the prospect of a move to 1.2980-1.3000.
- Short positions are considered in case of price fixing lower than 1.2870.
From the point of view of a comprehensive indicator analysis, we see a continuing downward interest, where a neutral signal appears, in relatively smaller time sections due to the existing stagnation.
