Recent December PMIs indicated solid growth continued in December as well. The GBP 2018 story still cast on Brexit and BoE’s policy settings.
The EU Withdraw bill heads for its report and third reading stages on Jan 16&17, according to Express.co.uk.
We expect the BoE likely to deliver another rate hike in November 2018, any possible early rate hike appears a mega bullish to the pound.
Data review: PMI readings suggest the solid end of the year 2017.
- UK Manufacturing PMI posted 56.3 in December, down from November’s 51-month high of 58.2
- UK Construction PMI posted 52.2 in December, down from 53.1 in November
- UK Services PMI registered 54.2 in December, up from 53.8 in November
Data Preview: Given the lack of macroeconomic data (high impact), it is understandably a quiet week in the markets. Manufacturing Production data due Wednesday.
As we forecasted in our last week’s weekly FX article, the cross has made another lower high at 0.8924. Stiff resistance 100DMA so far held and drag the price to 200DEMA.
Weekly trading range 0.8730-0.8960
Last quarter price action (Oct-Dec 2017) price action indicating already capped between 0.9015-0.9030. The lower low and the lower high pattern remains on the daily chart. While remaining close below 0.8925 (lower high) the cross has potential to pull back to the nearest support zone finds between 0.8740-0.8700. A weekly close below 61.8% fib reaction (0.8310-0.9300 rally) will open in 0.8530.
View: Potential to pull back
It is important to always keep in mind the risks involved in trading with leveraged instruments.
Have a question? Let us help!
A KTM Analyst is ready to assist you, click on the comment section below