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UK Economy Remains Under Pressure

1/26/2023 12:12 PM

Against extremely poor macroeconomic data from the UK, the GBP/USD pair continues to correct at 1.2400.

Manufacturing PMI was 46.7 points, up from 45.3 points earlier, and Services PMI was 48.0 points, correcting from 49.9 points earlier, which reduced the Composite PMI to 47.8 points from 49.0 points. The producer price index in December fell by 0.8%, which led to a correction of the annual growth of the indicator to 14.7% from 17.5%, and purchase prices – by 1.1%, against which the annual growth slowed down to 16. 5% from 19.2% before.

The upward trend in the GBP/USD pair is supported by the negative dynamics of the US dollar, which yesterday fell to 101.300 in the USD Index. The Mortgage Bankers Association (MBA) 30-year mortgage rate fell to 6.20% from 6.23% earlier but remains too high for the real estate market to recover, against which the weekly mortgage market index showed an increase of only 7.0 %, which is significantly inferior to the previous figure of 27.9%. The index of applications for purchasing houses on a mortgage increased slightly, amounting to 205.4 points instead of 198.7 points earlier.

On the daily chart, the trading instrument is moving within a local ascending corridor, trying to break last year's high of 1.2440.

Technical indicators reversed upwards: the range of EMA fluctuations on the Alligator indicator began to expand upwards, and the AO histogram forms ascending bars above the transition level.

Resistance levels: 1.2500, 1.2800. | Support levels: 1.2280, 1.1900.

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