The GBP/USD showed rally after the news release
The Germany PMI manufacturing and services sectors indices were lower than it was predicted data that does not add optimism about the euro perspectives. The euro with the US dollar remains below the 26th figure, risking at any time to resume decline. The eurozone manufacturing and services sectors preliminary business activity index disappointed traders. Still the main event that disappointed traders was Mr. Draghi’s speech.
We advise to consider long positions with the first target – 1.2580. After fixing above the first target, the level 1.2640 will become the next one.
The particular optimism spikes and at the same time the prices increase within the pair GBP/USD were caused by the October retail sales results. The National Bureau of Statistics (ONS) reported the volume increase by 0.8% m/m and 4.3% y/y after -0.3% m/m, + 2.7% y/y in September. This dynamics suggests that our fears about the household expenditures slowdown because of the weak salary growth were not consistent and consumers have again become the British economy main support.
The Last Committee minutes about the Bank of England monetary policy showed that some MPC members fear the sharp prices increase in the short term. All this may indicate that the pound downward movement cycle is coming to an end.
We advise to consider long positions with the first target – 1.5870. After fixing above the first target, the level 1.6080 will become the next one.
The Japan Minister of Finance was dissatisfied with the excessive yen decrease during the last week that gave rise to the profit-taking on short positions within the yen, as a result the pair corrected to 117.75. Taking into consideration the fundamental factors fueling the downward trend within the yen, the officials’ speech will unlikely have the lasting effect.
After testing the fresh highs at the level of 118.98, the dollar came under pressure and fell to 117.75. Rebound to the level of 118.40 has attracted interest for the sale that led to the dollar decrease to 117.75.
The current decline is undoubtedly corrective and bulls can try to test the resistance of 120.00 where will be possible the larger scale profit. The fall below the level of 116.50 will lead to the top formation.
Ruban SergeyAnalyst of «FreshForex» company
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