Of course, most of all market participants are now concerned with the fate of the endless negotiations between London and Brussels on a trade agreement. Nevertheless, after some incomprehensible and not entirely intelligible reports that Great Britain is allegedly ready to make some concessions, once again there is no specific information about the course of the negotiations. There are reports that the European Union has rejected the UK's newest proposals, but there are no details. So the market simply could not seriously consider all these countless rumors and speculations. As a result, the market was forced to rely on macroeconomic reports yesterday.
At the same time, the market reacted quite adequately to such reports. The pound grew at the beginning of the day due to the publication of the final data on the UK GDP for the third quarter, which turned out to be much better than forecasts. Even before its release, everyone was confident that the pace of the economic slowdown had slowed from -21.5% to -9.6%. But they not only slowed down to -8.6%, but the scale of the decline in the second quarter was also revised to -20.8%. It turns out that the economic downturn, although it looks quite deep, is still not as large as it was assumed quite recently.
GDP growth rate (UK):
But the US GDP also came out slightly better than forecasts, which subsequently led to a noticeable strengthening of the dollar. Recall that all preliminary estimates indicated a slowdown in the rate of economic decline from -9.0% to -2.9%. The final data showed a slowdown to -2.8%. As you can see, the difference is not so impressive, and the UK's data came out significantly better than forecasts. But the movement provoked by these data turned out to be much stronger. The point is that US macroeconomic reports carry much more weight.
GDP Growth Rate (United States):
It is clear that investors will be waiting all day for statements regarding the progress of the negotiations. Although it is rather necessary to say that the results of these very negotiations are already anticipated, since today is actually the last day when London and Brussels can agree on something. Everyone will be celebrating Christmas tomorrow. And if they do not have time to agree on anything like that, then they probably do not have time to do all this next week. After all, you still need to get the approval of all countries - members of the European Union, which will take some time. In other words, the negotiators simply don't have time. Nevertheless, if there is no news on this issue, the market will have no choice but to rely on US macroeconomic reports. In this case, we should expect the dollar to weaken. Of course, orders for durable goods should increase by 0.6%, but the state of the labor market has a much greater weight. But not everything is so simple with the labor market. On the one hand, the number of repeated applications should be reduced by 18,000. But the number of initial applications may increase by 20,000. The total number of applications should increase by 2,000. This certainly does not mean that the situation in the labor market is deteriorating, as the number of repeated applications is decreasing. However, this will clearly show that the labor market has stopped recovering, and the unemployment rate is still extremely high. Consequently, the economy has stopped recovering, which threatens prolonged stagnation. This will have a negative impact on the dollar.
Number of initial claims for unemployment benefits (United States):
The GBPUSD pair showed local downward interest towards the 1.3300 level, where a stop and a reversal occurred. There are no fundamental changes in the market, which cannot be said about the high degree of speculative interest.
The market dynamics still has very high indicators, more than 150 points, which makes it possible to enter and exit a trading position within the trading day.
If we proceed from the quote's current location, we can see a reversal, which led to a complete recovery of the pound's value relative to the decline over the past day.
Looking at the trading chart in general terms, the daily period, you can still see a medium-term upward trend, where the market sees the recent price fluctuations just as a corrective move at the peak of the trend.
We can assume that if there is silence in the vastness of the information flow, then the price could move towards 1.3450-1.3480, afterwards a stagnation will occur.
From the point of view of a comprehensive indicator analysis, you can see that technical instruments signal a buy since the quote recovered from a relatively recent decline.