Yesterday, the pound experienced a typical technical rebound. Against a completely empty informational background, it was able to gain a foothold, having won back the decline of the previous couple of days. Although the decline in the pound itself was caused by another increase in confusion around Brexit, as the British politicians got so confused once again that it was completely unclear how events would develop further. It is clear that such a situation is a permanent negative factor for the pound. However, yesterday, even British politicians took a break, which market participants did not fail to take advantage of.
Today, it will be somewhat easier in terms of macroeconomic data that will allow at least some conclusions to be drawn. In particular, we are talking about data on the lending market in the UK. Thus, the volume of consumer lending in September should be the same as in August, which is 0.9 billion pounds, on the face of the invariance of the consumer lending market. However, the number of approved mortgage applications may decline from 65,545 to 65,000, which would indicate a slight deterioration in the situation. In theory, this will have a negative impact on the pound.
Consumer lending (UK):
Nevertheless, the upcoming meeting of the board of the Federal Committee for Open Market Operations is of much greater importance.The results of which will be announced tomorrow. Given the fact that they are waiting for the next reduction in the refinancing rate, it will not surprise anyone if the dollar already shows a desire to weaken today. In addition, the growth rate of pending home sales in the United States should slow down from 2.5% to 1.4%, which indicates a decrease in activity in the real estate market in the near future. And in many ways, the British and American macroeconomic data will level each other, so that the market can enter the stage of stagnation, waiting for tomorrow's announcement of the results of the meeting of the Federal Committee on Open Market Operations.
Unfinished Home Sales (United States):
The GBP/USD pair, showing an extremely low volatility, has entered the stage of a technical pullback, after the quotation touched the border of the range of 1.2770. In fact, the pullback that we see is more similar to stagnation and reflects a slowdown within an earlier stop on October 25. The periodic resistance level is indicated at 1.2865; it plays the role of a deceleration boundary. Considering the trading chart in general terms, we see an attempt to recover relative to the inertial course, but the fulcrum in the face of the level of 1.2770 still keeps the quote from a more significant decline.
It is likely to assume that an indecisive fluctuation with respect to the 1.2810 / 1.2865 borders will still remain for some time, where it is worth observing the price fixing points with respect to the given frames before laying down trading operations.
Concretizing all of the above into trading signals:
- We consider long positions, in the case of price fixing higher than 1.2865, after which the pass in the inertia phase is higher than 1.2875 and after that the market is entered.
- We consider short positions in terms of local decline in the direction of 1.2810, but only if the price is fixed lower than 1.2830. The deeper steps will be considered after fixing the price lower than 1.2810.
From the point of view of a comprehensive indicator analysis, we see that indicators relative to all the main time intervals signal a purchase, but in the case of a slowdown, we will see an alternating signal at the minute and hour intervals.
