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In Anticipation of Positive Statistics on Business Activity in the UK

2/21/2023 11:33 AM

Against the background of the stabilization of the American currency, the GBP/USD pair is correcting, trading around 1.2006.

In the afternoon, the January data on business activity in the UK will be published, from which analysts expect to see positive dynamics: Manufacturing PMI may reach 47.5 points, higher than 47.0 points earlier, and Service PMI improves to 49.2 points from 48.7 points. Thus, the consolidated Composite PMI may correct to 49.0 points from 48.5 points earlier, which will be the first increase after six months of downward movement.

Quotes of the American currency are held at 103.800 in the USD Index in anticipation of the evening publication of data on the construction market. The sector has been in decline all of last year, but the January forecast for existing home sales suggests a correction to 4.10M from 4.02M earlier, and after twelve consecutive months of decline in the indicator, even a slight improvement can be perceived very positively.

On the daily chart, the trading instrument is moving below the support line of the local ascending corridor with the boundaries of 1.2480–1.2170, preparing for a decline.

Technical indicators strengthen the sell signal: the range of EMA fluctuations on the Alligator indicator expands downwards, and the AO histogram forms downward bars below the transition level.

Resistance levels: 1.2170, 1.2440. | Support levels: 1.1915, 1.1630.

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