The pound's decline from yesterday was purely symbolic, and was due to two main factors. Firstly, this is banal macroeconomic statistics, and we are talking about Halifax data on housing prices, the growth rate of which slowed down from 1.8% to 1.1%. Although they expected a slowdown, but only up to 1.6%. And given the high importance of the real estate market to determine the investment attractiveness of the UK, and therefore the pound, it is not surprising that investors did not have much reason to rejoice. Secondly, another rumor about Brexit, and yesterday, the focus was on a message from an anonymous source from Downing Street 10, about the progress of negotiations on this issue. The message was published in one of the British magazines, after which it quickly spread throughout the world. It referred to the fact that Ireland and the European Union flatly refused to discuss anything related to the border between Ireland and Northern Ireland, thereby leading negotiations into a dead end. The meaning of the message boils down to the banal thought that it was Europe that was torpedoing negotiations, not allowing them to move off the ground, which means that no further delays will bring anything, since Europe does not even intend to discuss the most important issue for Britain. In fact, Europe is blamed for the fact that Boris Johnson has no choice but to implement Brexit without a divorce agreement. And in this regard, there is only one question - why was the decline in the pound clearly symbolic? Apparently, the fact is that we are talking about an anonymous message, and far from the fact that its provisions coincide with the position of the prime minister. So until an official reaction to this message follows, it is premature to draw any far-reaching conclusions.
If we talk about today, then only data on producer prices in the United States are of interest, the growth rate of which may remain unchanged. So in general, the overall economic picture remains unchanged, and investors have nothing to focus on. Moreover, tomorrow the text of the minutes of the Federal Open Market Committee meeting will be published, and so far it is better to postpone the sharp movements. True, if the official reaction of Downing Street 10 to yesterday's publication regarding the course of negotiations on Brexit follows, then sudden and unexpected jumps are possible. Another thing is that there is practically no doubt that these fluctuations will be negative for the pound.
Producer Price Growth (US):
The GBP/USD pair has been fluctuating within 1.2270/1.2350 for more than a week, while exhibiting reduced volatility. In fact, we see a characteristic stop with a given amplitude fluctuation at the stage of the recovery process, which characterizes a certain indecision. Considering the trading chart in general terms, we see that the main downward trend is maintained in the market, although we are still in the phase of elongated correction. Having a deceleration, this variable stops in the process of accumulation, which as a result can fall into an impulsive leap in the market.
It is likely to assume that the amplitude fluctuation within 1.2270/1.2350 still remains in the market, where it is worth analyzing the consolidation points and filtering possible punctures with shadow. The subsequent point of the variable support is the value of 1.2200, where the quote previously found the support level.
Concretizing all of the above into trading signals:
Long positions, we consider in case of price consolidation higher than 1.2300, with the prospect of a move to 1.2340-1.2350. We consider short positions in the case of a clear consolidation of the price lower than 1.2265 (not a puncture), with the prospect of a move to 1.2210.From the point of view of a comprehensive indicator analysis, we see that indicators at all the main time periods signal a downward trend. It is worth considering that if the cumulative process continues, then a variable change in the indicators in minute and hour periods is possible.