Current trend

During the morning session, the GBP/USD pair retreats from the psychological mark of 1.3000 and the highs of October 21 against neutral macroeconomic reports and the strengthening of the American dollar.

UK Finance Minister Rachel Reeves acknowledged the difficult situation of the household economy and announced the need to take tough fiscal measures to eliminate the state budget deficit. Experts doubt that such rhetoric is compatible with the new decree on the 3.0B pounds allocation to finance the country’s armed forces, although these funds are much more in demand in other areas. The official will announce the one-time payment today at 12:00 (GMT 2) during the budget message. Analysts believe the figure will consolidate around 2.3% of the gross domestic product (GDP). Meanwhile, according to the Bank of England, the September number of consumer loans issued amounted to 65.65K, above both the forecast of 65.00K and the previous 64.96K. However, the volume of consumer lending slowed to 1.231B pounds, and net loans to individuals – to 3.800B pounds.

The American dollar is slightly below yesterday’s highs at 104.10 in the USDX against macroeconomic statistics. The October JOLTS open vacancies in the labor market fell from 7.861M to 7.443M, much lower than the forecast of 7.980M, reflecting the labor market weakness and signaling a slowdown in employment in leading sectors. On the other hand, the October Conference Board consumer confidence index strengthened from 99.2 points to 108.7 points, allowing the dollar to continue strengthening.

Support and resistance

On the daily chart, the trading instrument is correcting near the support line of the ascending channel, with dynamic boundaries of 1.3400–1.2900.

Technical indicators are holding the sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram is forming correction bars in the sell zone.

Resistance levels: 1.3040, 1.3260.

Support levels: 1.2960, 1.2800.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.2960, with the target at 1.2800. Stop loss — 1.3050. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.3040, with the target at 1.3260. Stop loss — 1.2980.