Current trend

After Friday’s growth, which developed despite poor British macroeconomic statistics, today during the Asian session, the GBP/USD pair shows ambiguous dynamics, consolidating around 1.2146.

The September core UK retail sales index corrected by –1.0% after rising 0.6% earlier, resulting in a –1.2% YoY correction. Sales fell 0.9% MoM from 0.4% previously, and –1.0% YoY, although last month was up 0.6%. Interim data on the labor market will be published tomorrow: if the employment rate remains at –207.0K, this will put pressure on the pound.

The American dollar again consolidated above 106.000 in the USD Index. Tomorrow, investors will pay attention to statistics on business activity: in contrast to locally growing European indices, American indicators continue to decline. Thus, the October indicator in the manufacturing sector may adjust from 49.8 points to 49.5 points, and in the services sector – from 50.1 points to 49.9 points, entering the red zone.

Support and resistance

On the daily chart, the trading instrument is correcting within the global channel with dynamic boundaries of 1.2230–1.2000, reversing at the resistance line.

Technical indicators are strengthening the sell signal: fast EMAs on the Alligator indicator are below the signal line, and the AO histogram is forming corrective bars in the sell zone.

Support levels: 1.2070, 1.1900.

Resistance levels: 1.2240, 1.2400.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.2070 with the target at 1.1900. Stop loss – 1.2120. Implementation period: 7 days or more.

Long positions may be opened after a reversal, growth, and consolidation of the price above 1.2240 with the target at 1.2400. Stop loss – 1.2150.