This week, the pair is growing GBP/USD, which is associated with the change of the ruling cabinet in the UK and the release of several poor US statistics.
The appointment of former Finance Minister Rishi Sunak to the post of head of the national government reassured investors and returned their interest in the pound. Officials have already begun drawing up plans to stabilize the economy, including the abolition of much of the tax cut program and the elimination of large amounts of public debt. The announcement of specific details was postponed for two weeks until November 17, which did not exert any significant pressure on the positions of the British currency. However, experts note that global recession risks are still growing. High inflation, along with the lifting of fiscal easing and rising interest rates, will continue to pressure demand and slow economic growth, leading to a new weakening of the pound.
The US dollar remains under pressure after the release of poor October macroeconomic data: the index of business activity in the industry fell to 49.9 points, and for the service sector – to 46.6 points, while consumer confidence fell to 102.5 points, which allowed experts to talk about the cooling of the US economy and the possibility of reducing the US Federal Reserve rate of increase in interest rates by the end of the year from 75.0 to 50.0 basis points. Today, traders expect to release weekly data from the national labor market, and if they turn out to be negative, the US dollar may continue to decline.
The long-term downtrend continues, but the price is in correction. In the case of a breakout of 1.1718 (Murrey [8/8]), its targets will be 1.2020 (Fibonacci retracement 23.6%) and 1.2207 (Murrey [+1/8]). The key “bearish” level is 1.1230 (Murrey [7/8]), supported by the middle line of Bollinger bands. If it is broken, the price may fall to the area of 1.0950 (the lower line of Bollinger bands) and 1.0742 (Murrey [6/8]).
Technical indicators point to continued growth: Bollinger and Stochastic bands are reversing upwards, and MACD is increasing in the positive zone.
Resistance levels: 1.1718, 1.2020, 1.2207. | Support levels: 1.1230, 1.0950, 1.0742.