Current trend

The GBP/USD pair is falling, trading at 1.2927, amid a strengthening American dollar and poor expectations for today’s UK macroeconomic statistics due at 10:30 (GMT 2).

According to preliminary estimates, the October manufacturing PMI may remain at 51.5 points, while the service PMI may fall from 52.4 points to 52.3 points, so the composite PMI may amount to the previous 52.6 points, having practically no impact on the market. In addition, the amount of borrowing for the first six months of this year exceeded official forecasts by 7.0B pounds, reaching 79.6B pounds, putting pressure on the national economy, as was reported yesterday by the Chancellor of the Exchequer Rachel Reeves.

The American dollar is trading at 104.0 in the USDX, slightly below yesterday’s highs, reacting to a reduction in September existing home sales to 3.84M, below the previous 3.88M and the expected 3.88M. Negative dynamics have been developing for the second month, approaching the summer 2023 low of 3.78M. At 14:30 (GMT 2), investors will pay attention to initial jobless claims, which may increase from 241.0K to 243.0K.

Support and resistance

On the daily chart, the trading instrument is approaching the support line of the ascending Expanding formation pattern of 1.3450–1.2890. Technical indicators gave a sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram is forming correction bars, falling into the sell zone.

Resistance levels: 1.2970, 1.3180.

Support levels: 1.2890, 1.2690.

Trading tips

Short positions may be opened after the price declines and consolidates below 1.2890, with the target at 1.2690. Stop loss is 1.2950. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 1.2970, with the target at 1.3180. Stop loss is 1.2900.