Although everything indicated that the day would be extremely calm and quiet, it was not without the favorite British farce. Brexit, or rather early parliamentary elections, is back on the agenda. Nigel Farage, the leader of the Brexit party, who ridiculed Boris Johnson and his version of the divorce agreement last week, suddenly announced that he would not interfere with the conservatives. The fact is that Farage initially threatened to nominate his candidates in all constituencies, which was supposed to take away the votes from just the candidates from the conservative party, and play into the hands of the Labor Party. Now, the Brexit party will not interfere with the Conservatives under their feet, and will only nominate candidates in those districts where the positions of the Conservatives are already weak. Essentially, this predicts Boris Johnson's victory, which reduces uncertainty around Brexit itself, as it suggests that there will not be a radical change of course, like a second referendum or something else from this series. Thus, it is not surprising that despite the absence of the majority of traders on the market, the pound was able to demonstrate good growth.
At the same time, as expected, the market completely ignored the macroeconomic statistics, which were abandoned yesterday. Which, among other things, turned out to be worse than forecasts. Thus, preliminary data on UK GDP for the third quarter showed a slowdown in economic growth from 1.3% not to 1.1%, but to 1.0%. Due to this, the British economy is really slowing down really fast. In addition, industrial production, which until recently decreased by 1.8%, slowed down its decline not to 1.3%, but to 1.4%. The dynamics are certainly encouraging, but it still does not get more fun from this.
UK GDP growth rate:
Moreover, although the United States is a business day today, no macroeconomic data is published either in America or in Europe. Meanwhile, Britain remains the focus of attention. At least for the reason that the UK publishes labor market data. Another thing is that all indicators should remain unchanged, with the exception of the number of applications for unemployment benefits, which could be reduced by 1.1 thousand. And of course, there is the possibility of new sharp steps from British politicians, which can have even a much greater impact.
Applications for unemployment benefits (UK):
The GBP/USD pair managed to show considerable activity over the past day, forming a rebound from the range level of 1.2770. A surge of about 115 points led to the quotation returning to the 1.2880 area, where, against the background of local overbought, it slowed down, forming a small pullback followed by a stop. In fact, the current surge in prices has not brought anyone radical; the movement is still looped within two levels. Considering the trading chart in general terms, we see that the fluctuation is expressed in a flat of 1.2770 / 1.3000, which is preserved to this day, and the quotation has worked out its lower border once again.
It is likely to assume that the first thing we will encounter is a local overbought, which temporarily puts pressure on buyers, giving out the scope of the fluctuation 1.2845 / 1.2890. The next step will determine the fixation points, relative to the values of 1.2840 / 1.2895.
Concretizing all of the above into trading signals:
- We consider long positions in the case of price fixing higher than 1.2895.
- We consider short positions in the case of a clear fixation of the price below 1.2840.
From the point of view of a comprehensive indicator analysis, we see that due to a surge in prices, indicators unanimously turned upward, which can express as local interest.
