GBP/USD: correction is overdue. Trading Recommendations
Trading recommendations and Technical Analysis – HERE!
Despite the fact that the revised data for UK GDP for the 3rd quarter was worse than expected (2,1% instead of 2.3% as previously thought), GBP/USD rose in the European session after the news. Indicators of the sphere of services and investments were also reduced. The UK economy grew less than previously thought.
Weak growth of consumer prices in November increased in annual terms by 0.1% after falling 0.1% in October, lower output price index of manufacturers (in November, the index decreased by 1.5%), falling oil prices and commodities, suggests that inflationary pressure is actively reduced.
Such data about the state of the UK economy will force the Bank of England is likely to shift the timing of raising interest rates in the country further to the end of 2016, if things do not change.
The difference in the direction of monetary policy from the fed and Bank of England will weigh on the pair GBP/USD in the medium term.
Nevertheless, today the pair GBP/USD got a boost from data on the balance of payments deficit, which in the 3rd quarter has not changed and amounted to 17.46 billion pounds, against the forecast of growth to 21.5 billion pounds.
A large current account deficit of the balance of payments poses a threat to financial stability in the country. And one of the ways its content could be lower interest rates. A cheaper national currency will allow to increase the supply of Finance from export currency earnings to the state budget.
With the opening of the trading day the pair GBP/USD is growing in a short-term correction after a strong decline since the beginning of the month and the current week.
This is a shortened week, and tomorrow is a short trading day. Therefore, it is not excluded, the fixation of numerous short positions in the pair that can enhance its growth by the end of the day.
From the news today waiting for the US data, when at 13:30 (GMT) and 15:30 will be published data, the most important of which are the price indices and personal consumption expenditure, as well as orders for durable goods for November. At 15:00 (GMT) we expect the consumer confidence index Reuters/Michigan in December and data on new home sales in November. If they are worse than the forecast, possible fixation of long positions on US dollar, which will also lead to a rise in the GBP/USD.
