GBP/USD: pound is resisting the pressure
British pound was trying to resist the general USD strength. GBP bulls were supported by the decline in EUR/GBP. However, GBP/USD failed to show growth.
On the one hand, the news flow from the UK was mostly positive. UK November PMIs showed mostly a positive outcome, while the British government has revised 2014-2015 economic growth forecasts to the upside. Finance Minister George Osborne said in his autumn statement that the economic growth has become more balanced and pointed out that Britain is now leading in growth rates among the biggest advance economies. The Bank of England has left monetary policy unchanged.
On the other hand, news from the US was even more positive. The market expects America to raise rates sooner than the UK and this will continue keeping GBP/USD under pressure.
Next week Britain’s economic calendar is not very busy: pay attention to the UK manufacturing production data on Tuesday and trade balance on Wednesday. All events which will have critical importance for GBP/USD will take place in a week. Watch the release of the Bank of England’s meeting minutes and the Federal Reserve’s meeting on Dec. 17.
The pair’s still trading below the resistance line of the downtrend since July highs. For now this line is providing resistance in the 1.5800 area. The space to trade in the sideways range remains. However, a fix below 1.5600 will open the way down to 1.5400 and lower.