Traded in the narrowest weekly range since July 2014, the British pound at the end of the five-day period by November 22 recorded the most significant sale since the beginning of the month amid disappointing statistics on Great Britain's business activity in October. The index of procurement managers in the services sector unexpectedly went into the critical zone (below 50), indicating a decline. The manufacturing PMI has been there for several months. The situation in the British economy continues to deteriorate, which increases the risks of an increase in the number of dissenters in the Monetary Policy Committee. Let me remind you, at the last meeting of the Bank of England, two out of ten officials voted to reduce the repo rate.

However, the problems of the economy do not bother the bulls on GBP/USD. Despite the sales on November 22, the market is optimistic. Goldman Sachs includes sterling purchases in the TOP-10 strategies for 2020 and forecasts a EUR/GBP drop of 4% in the first quarter of next year. BlackRock and Eurizon SLJ Capital expect to see the pound at $1.35, while BofA Merrill Lynch is talking about a figure of $1.39. The forecasts are based on the assumption that the Conservative Party will be able to get an absolute majority in the December 12 elections, which will lead to a fairly quick exit of Britain from the EU. I must say that the chances of such an outcome are quite high. Recent opinion polls suggest the advantage of the Tories over the Labour Party in 11-15 points.

The dynamics of the popularity of political parties

Certainly, if we proceed solely from economic indicators, the GBP/USD prospects can be assessed as bearish. While Britain's PMI are in a critical zone, US business activity in November peaked in the past four months. This indicates a divergence in GDP growth of Great Britain and the United States. The Fed has made it clear that before the summer of 2020 it does not intend to change the rate on federal funds, while the chances of the Bank of England lowering its repo rates are growing by leaps and bounds. At the same time, the pound has been neglected over the past few years in the form of high political risk associated with disorderly Brexit. Currently, the market does not believe in this, and speculators are actively getting rid of short sterling positions, which allows large banks to make bullish forecasts, despite the worsening macroeconomic statistics.

In my opinion, in the clash of politics and economics, the first will prevail, and the next televised debates with the participation of seven political parties can have a greater impact on the GBP/USD dynamics than disappointing statistics on business activity.

Technically, the Expanding Wedge reversal pattern can be formed on the daily GBP/USD chart, which will become an alarming signal for buyers. Their main task is to keep the pair above support at 1.272-1.277. It will turn out - it will be possible to think about restoring the upward trend in the direction of the targets by 88.6% and 200% according to the Bat and AB=CD patterns.