Last week pound was growing and reached the maximum since the beginning of October at the level of 1.3360 on Friday.
The investors concern more upon the possible slowing of the monetary policy tightening rate in the USA, than the Brexit negotiations of UK and EU difficulties, where the parties still cannot began to discuss trading agreements due to the fact that the Irish border issue is unclear. Irish government wants to get the guarantees from UK government, that the control on the border between North Ireland and Republic Ireland won’t be implied. Otherwise the Irish party, represented by Commissioner for Agriculture Phil Hogan threatens to block further Brexit negotiations.
Intransigence of the parties and the delaying of Brexit negotiations make business community fears that the deal won’ be done at all, and UK will leave EU without any agreements. This has led to the fact that a number of companies decreased its presence in the country, which can result in the Industrial Production and GDP fall in the UK.
Last week British Office for Budget Responsibility decreased the next year GDP growth forecast from 2.0% to 1.5%. The middle term perspectives of the currency are still unclear.
Support and resistance
Technically the price is tending to the level of 1.3366 (Murray [7/8]) and after the breakout can move upwards to the level of 1.3427 (Murray [8/8]). Otherwise the price can return to the levels of 1.3305 (Murray [6/8], the middle line of Bollinger Bands), 1.3244 (Murray [5/8]). Technical indicators reflect the growth. Bollinger Bands are pointed upwards, Stochastic reversed upwards.
Resistance levels: 1.3366, 1.3427, 1.3488.
Support levels: 1.3305, 1.3244, 1.3183.
Long positions can be opened above the level of 1.3366 with the target at 1.3427 and stop loss at 1.3300.
The consolidation of the price below the level of 1.3305 will make short positions with the targets at 1.3244, 1.3183 and stop loss at 1.3340 relevant.