The pair is trading with almost no momentum, remaining close to the 1.3040 reference level. The “bulls” have maintained the bullish momentum formed at the end of last week, but are awaiting new catalysts this week. Last Friday, the British currency received notable support from retail sales data for September: in annual terms, the indicator accelerated from 2.3% to 3.9%, with a forecast of 3.2%. On a monthly basis, it decreased from 1.0% to 0.3%, while analysts expected -0.3%. Meanwhile, the indicator without fuel rose from 2.2% to 4.0%, compared to a previous estimate of 3.2%.
At the beginning of the week, the pound came under pressure from the release of macroeconomic statistics on house prices from research company Rightmove (OTC:) Group Ltd. In October, the index slowed from 1.2% to 1, 0% year-on-year and 0.8% to 0.3% monthly, which could help alleviate inflationary risks in the country.
Representatives of the Bank of England, including the head of the regulator, Andrew Bailey, will give speeches tomorrow. Officials are expected to advocate for further reductions in borrowing costs, considering the sharp drop in inflation in the country, as well as the easing of monetary policy by the Bank of England's main competitors: the US Federal Reserve. United States and the European Central Bank (ECB).
On Thursday, the United Kingdom will present data on business activity in the industrial and services sectors from S&P Global. Forecasts point to a slight slowdown in the PMI of the industrial sector, from 51.5 points to 51.4 points, and of the services sector, from 52.4 points to 52.2 points.
Support and resistance levels
On the daily chart, the Bollinger Bands indicator shows a moderate decline: the price range is narrowing, indicating ambiguous trading dynamics in the ultra-short term. The MACD turns upward, forming a new buy signal (the histogram is above the signal line). Stochastic shows a similar dynamic, with uncertain growth and a rebound from the “20” level, indicating the risk of the pound being undervalued in the ultra-short term.
Resistance levels: 1.3050, 1.3100, 1.3150, 1.3200.
Support levels: 1.3000, 1.2948, 1.2900, 1.2860.
Commercial scenario
Long positions: They can be opened if the level of 1.3100 is broken firmly to the upside, with the target at 1.3200. Set a Stop Loss at 1.3050. The estimated time is 2-3 days.
Short positions: If the pair falls below the 1.3000 level, it could signal the return of bearish momentum, opening the door to new short positions with a target at 1.2900. Set a Stop Loss at 1.3050.
