Current dynamics

The GBP/USD pair's decline was halted in the 1.2505–1.2480 area due to profit-taking on October-November selling and the release of negative US macroeconomic data.

In November, the Conference Board's consumer confidence index stood at 111.7 points, below the forecast of 111.8 points, and the volume of new housing sales in October fell by 17.3% against the forecast of 3.6%, a record since 2010, and in absolute terms stood at 610 thousand against the forecast of 730 thousand, which could cause a slowdown in the dynamics of gross domestic product (GDP).

In the UK, the consumer price index rose to 2.3% year-on-year in October, beating the forecast of 2.2% and the previous value of 1.7% and settled at 0.6% month-on-month, the highest since April, reflecting the risks of an acceleration of inflation, as a result of which the Bank of England may postpone the interest rate cut at the meeting on December 19, which supports the pound. On Friday, financial stability reports and minutes of the latest meeting of the Bank of England will be published, where investors expect further steps towards monetary easing. In addition, analysts suggest that the net volume of consumer loans will increase from 3.8 billion pounds to 4.1 billion pounds, and the number of mortgage applications approved in October will decrease from 65,647 thousand to 64,100 thousand.

On December 18, the US Federal Reserve will hold a monetary policy meeting: according to the Chicago Mercantile Exchange (CME) FedWatch, the probability of an interest rate adjustment by -25 basis points has increased from 55.7% to 66.5%, which is putting pressure on the US dollar. Today at 17:00 (GMT 2), investors will pay attention to the personal consumption expenditure price index - the indicator most often used by the regulator in its calculations: the base value may change from 2.7% to 2.8% on an annual basis and remain at 0.3% on a monthly basis, while the broader index is expected to adjust from 2.1% to 2.3%.

Support and resistance levels

The long-term trend is bearish: from October to November, the price broke through the support level of 1.2700 and reached the level of 1.2480. Here the correction began, which can reach the resistance area of 1.2715, after the breakout, the movement will accelerate towards the area of 1.2870 and 1.3055, and otherwise - towards the target of 1.2480. The RSI (14) indicator entered the oversold zone last week, forming a "convergence" signal, within which it is worth considering long positions in the correction.

The medium-term trend is bearish: last week, quotes reached zone 3 (1.2546–1.2518) and started a correction to the trend resistance area of 1.2795–1.2767, where short positions will become relevant with the target at last week's low of 1.2490.

Resistance levels: 1.2715, 1.2870, 1.3055.

Support levels: 1.2480, 1.2322, 1.2058.

Business scenarios

Long positions can be opened from the level of 1.2480 with the target at 1.2715 and the stop-loss at 1.2410. Implementation time: 9–12 days.

Short positions can be opened below the level of 1.2410 with the target of 1.2190 and the stop-loss at the level of 1.2480.