GBP/USD: downtrend remains in place
By Elizaveta Belugina
British pound has left its sideways range and tested levels above 1.5800. In line with our expectations, the market players used this increase as an opportunity to sell the pair. November is the 5th month of losses for the British currency. GBP/USD fell below the monthly Ichimoku Cloud. Taking into account the technical picture and the general strength of the US dollar, there are reasons to expect the resumption of the downtrend.
In the first 3 days of the next week we’ll get the latest news about the UK economy: the nation will release manufacturing, construction and services PMIs for November. The Bank of England will meet on Thursday. The minutes of the central bank’s November meeting were more “hawkish” than economists had expected: 2 members of the Monetary Policy Committee kept insisting on the rate hike. Still, they won’t be able to pull other MPC members to their side. Inflation remains low, housing prices growth has slowed down, the weak economic growth is based on the public spending instead of rising consumption, while business investment declined.
The pair recovered 38% of its decline since late October. This may provide sellers with strength. Next week bears may increase pressure on 1.5600. Targets remain at 1.5500 and 1.5380. Resistance lies at 1.5890 and 1.5950.