Without any data or political updates from the UK, the British pound did not find any direction on the charts yesterday. GBPUSD opened at 1.2923 and spent the most part of the Asian session in the bears’ territory. It bounced off support around the 1.2900 handle and closed virtually unchanged at 1.2921.
The only major forex news yesterday was the minutes of the last Federal Open Market Committee (FOMC) meeting. It did not really reveal anything new to market participants. According to the report, the interest rate decision-making board of the Federal Reserve do not see any need to cut rates further this year after slashing them two consecutive times. They did warn that if economic data were to take a turn for the worse, the central bank would be ready to act.
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Today, at 9:30 am GMT, the Office for National Statistics (ONS) will release its data on Public Sector Net Borrowing for October. It is expected to print at 8.5 billion GBP. A figure less than forecast is typically bullish for the British pound. This could indicate that the government’s budget deficit is less than consensus.
This report does not typically move markets so it may be a good idea to keep tabs on our site for updates on the political front. News surrounding the upcoming general elections in December point to the Conservatives having a strong lead over Labour. This has been fuelling the pounds gains against most of its counterparts. Therefore, any more of news consistent with it will be bullish for the pound as it would make it more likely for a Brexit plan to be passed on to Parliament.
GBPUSD Outlook
GBPUSD found bids on the rising trend line (from connecting the lows from November 8, November 14, and November 20) and a prior falling trend line that has since been broken (connecting the highs of October 21 and October 31). The area around the 1.2900 handle also coincides perfectly with the 50% Fib level if you draw the Fibonacci retracement tool from the low of November 14 to the high of November 18.
If there are enough buyers in the market, GBPUSD could test resistance at its most recent highs around 1.2980. On the other hand, if there are enough sellers in today’s trading ,GBPUSD could drop to support at its November 14 lows around 1.2820.Download our latest quarterly market outlook for our longer-term trade ideas.
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