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Pound is Consolidating Near Local Highs

12/14/2022 10:29 AM

The British pound is trading with mixed dynamics, holding close to 1.2345. Market activity remains rather low, as traders prefer to wait for the publication of the minutes of the two-day meeting of the US Federal Reserve. The regulator is expected to slow down the pace of tightening monetary policy against the backdrop of declining inflation and growing recession risks. November data on the Consumer Price Index released in the US confirmed the downward trend: the annual rate slowed down from 7.7% to 7.1%, while the forecast was for a fall to 7.3%.

Data from the UK, in turn, again proved to be ambiguous. Thus, the Average Earnings Excluding Bonus increased by 6.1% in October after an increase of 5.8% in September, while analysts' forecasts assumed 5.9%, and Including Bonus the indicator adjusted from 6.0% to 6.1%, which was slightly short of the expected growth of 6.2%. At the same time, the Claimant Count Change increased by 30.5 thousand in November after falling by 6.4 thousand a month earlier, while analysts expected the negative dynamics to continue at the level of -13.3 thousand. The Unemployment Rate in the UK, calculated according to the standards of the International Labor Organization (ILO), rose from 3.6% to 3.7% in October, which coincided with market forecasts.

In the meantime, against the backdrop of cold weather in the United Kingdom and increasing electricity consumption, the operator of the unified energy system National Grid Plc. began preparations for the launch of two coal-fired thermal power plants in North Yorkshire, which, according to preliminary estimates, will cost 400.0 million pounds. According to the operator's CEO John Pettigrew, despite the record export of "blue fuel" since 2016, this winter the British may not have enough resources even to cover household needs.

Bollinger Bands on the daily chart show a steady increase. The price range expands from above, freeing a path to new local highs for the "bulls". MACD has reversed to growth having formed a weak buy signal (located above the signal line). Stochastic, having approached the level of "80", reversed into a horizontal plane, reacting to the emergence of mixed trading dynamics.

Resistance levels: 1.2400, 1.2500, 1.2600, 1.2750. | Support levels: 1.2311, 1.2152, 1.2027, 1.1939.

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