Current dynamics

The decline in the GBP/USD pair slowed in the 1.2505-1.2480 area due to profit-taking on sales in the period from October to November and after the publication of negative US macroeconomic data.

Thus, in November, the Conference Board consumer confidence index was 111.7 points, below the forecast of 111.8 points, and the October volume of new home sales fell by 17.3% compared to expectations of 3.6%, a record since 2010, which in absolute terms was 610.0 thousand against estimates of 730.0 thousand, which could cause a slowdown in the dynamics of the gross domestic product (GDP).

In the UK, the consumer price index rose to 2.3% year-on-year in October, exceeding the forecast of 2.2% and the previous value of 1.7%, and amounted to 0.6% - in monthly terms, the highest since April, reflecting the risks of accelerating inflation, as a result of which the Bank of England may postpone the interest rate cut at the meeting on December 19, which supports the pound. On Friday, financial stability reports and the minutes of the latest meeting of the Bank of England will be published, where investors are counting on further steps towards easing monetary policy. In addition, analysts expect that net consumer lending will increase from 3.8 billion pounds to 4.1 billion pounds, and the number of approved mortgage applications in October will decrease from 65,647 thousand to 64,100 thousand.

The US Federal Reserve's monetary policy meeting is scheduled for December 18: according to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of an interest rate adjustment by -25 basis points has increased from 55.7% to 66.5%, putting pressure on the US dollar. Today at 17:00 (GMT 2), investors will pay attention to the personal consumption expenditure price index, the indicator that the regulator most actively uses in its calculations: the base value may change from 2.7% to 2.8% on an annualized basis and remain at 0.3% on a monthly basis, while the broader index is expected to adjust from 2.1% to 2.3%.

Support and resistance levels

The long-term trend is downward: from October to November, the price broke through the support level of 1.2700 and reached the level of 1.2480. Here, a correction began, which may reach the resistance area of 1.2715, after the breakout, the movement will accelerate to the area of 1.2870 and 1.3055, and otherwise - to the target of 1.2480. The RSI indicator (14) entered the oversold area last week, forming a "convergence" signal, within which it is worth considering long positions in the correction.

The medium-term trend is downward: last week, quotes reached zone 3 (1.2546–1.2518) and began a correction to the trend resistance area of 1.2795–1.2767, where short positions with a target at last week’s minimum of 1.2490 will become relevant.

Resistance levels: 1.2715, 1.2870, 1.3055.

Support levels: 1.2480, 1.2322, 1.2058.

Trading scenarios

Long positions can be opened from the level of 1.2480 with the target at 1.2715 and stop-loss at 1.2410. Implementation period: 9-12 days.

Short positions can be opened below the level of 1.2410 with a target of 1.2190 and a stop-loss of 1.2480.