After the BREXIT extension our point of view on GBP/USD has changed and became more neutral. Right now political factors are dominating. We remind you that on December 12-th there are elections in GB.
The situation in the British economy is not so optimistic:
1. Inflation dropped to 1,75% (January 2017 levels);
2. Production is slowing down;
3. Construction PMI has been remaining stable below 50 from the first quarter 2019
4. Manufacturing PMI is below 50 from May 2019.
Owing to Bank of England, which is not decreasing its interest rate, the US dollar has to look more attractive.
Technical analysis
After testing 1,30000 (highest high) British pound corrected and started forming a 'bullish flag'. BUT the indicators reversed down.
• Parabolic SAR reversed and started decreasing;
• MACD lines are heading down too;
• Williams %R broke its upper line.
If the pair breaks 1,30000 up - the target will become 1,33000. The support level is on 1,27000
The situation in the British economy is not so optimistic:
1. Inflation dropped to 1,75% (January 2017 levels);
2. Production is slowing down;
3. Construction PMI has been remaining stable below 50 from the first quarter 2019
4. Manufacturing PMI is below 50 from May 2019.
Owing to Bank of England, which is not decreasing its interest rate, the US dollar has to look more attractive.
Technical analysis
After testing 1,30000 (highest high) British pound corrected and started forming a 'bullish flag'. BUT the indicators reversed down.
• Parabolic SAR reversed and started decreasing;
• MACD lines are heading down too;
• Williams %R broke its upper line.
If the pair breaks 1,30000 up - the target will become 1,33000. The support level is on 1,27000