The GBP/USD pair is trading with almost zero momentum, remaining near the 1.3040 reference level. The "bulls" have maintained the upward momentum formed at the end of last week but are waiting for new catalysts this week. Last Friday, the British currency received notable support from the September retail sales data: on an annual basis, 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 had expected -0.3%. Meanwhile, the indicator excluding fuel rose from 2.2% to 4.0%, compared to a previous estimate of 3.2%.
At the start of the week, the pound is under pressure from the release of macroeconomic statistics on housing prices from research company Rightmove (OTC:RTMVY) Group Ltd. In October, the index slowed from 1.2% to 1.0% year-on-year and from 0.8% to 0.3% month-on-month, which could help ease inflationary risks in the country.
Tomorrow, speeches will be held by Bank of England representatives, including the head of the regulator, Andrew Bailey. It is expected that officials will advocate for further reductions in borrowing costs, considering the sharp decline in inflation in the country, as well as the monetary policy easing by major competitors of the Bank of England—the US Federal Reserve and the European Central Bank (ECB).
On Thursday, the UK will present data on business activity in the industrial and services sectors from S&P Global. Forecasts suggest a slight slowdown in the industrial sector's PMI, from 51.5 points to 51.4 points, and in 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 is turning upward, forming a new buy signal (the histogram is above the signal line). The Stochastic shows a similar dynamic, with uncertain growth and a rebound from the "20" level, signaling 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.
Trading Scenario
Long positions: Can be opened if the 1.3100 level is firmly broken to the upside, with a target of 1.3200. Set a Stop Loss at 1.3050. The estimated timeframe is 2-3 days.
Short positions: If the pair breaks below the 1.3000 level, it could signal the return of bearish momentum, opening the door for new short positions with a target of 1.2900. Set a Stop Loss at 1.3050.