GBPUSD Analysis 21.12.2018

The British pound rose during the US session to recover to the sixth session in seven sessions from its lowest since April 11, 2017 against the US dollar following developments and economic data followed Thursday by the British economy and the US economy which included decisions and trends Monetary policy makers at the Bank of England and the disclosure of monetary policy statement.

UK Retail Sales rose 1.4% from 0.4% in October, beating expectations for a 0.3% rise. The core reading of the same index, excluding car fuel, rose 1.2% against the decline. 0.4% in October, also outperforming expectations of a 0.2% rise.

In the same context, the annual retail sales index showed accelerated growth to 3.6% from 2.4% in the previous year's reading, except for expectations of 2.0%. The core annual reading showed that growth accelerated to 3.8% versus 2.8% The previous annual reading for the month of October, also beyond expectations at 2.3%.

In addition, we also followed the RBA's approval by the Bank of England monetary policy makers to keep interest rates at 0.75% for the third consecutive meeting and for the asset purchase program at £ 435 billion for the 19th consecutive meeting, with the unanimous vote of nine Fix short-term benchmark interest rates and stay on the asset purchase program with little change.

In another context, the leader of the British House of Representatives Andrea Ledesum said that the start of the discussion of the agreement to leave Britain from the European Union in parliament on January 9 next after the end of the official holiday scheduled to begin tomorrow to the seventh with next month, adding that Prime Minister Teresa Mae will try to secure the necessary guarantees before the exit agreement is presented to the parliament and vote on it on the 21st of next month.

On the other hand, we followed the US economy's index of claims for the last week with December 15, which showed a rise of 12 thousand applications to 214 thousand applications, below the expectations at 216 thousand applications, as shown in the index of continuing requests for support for the past week On the eighth of this month, up by 27 thousand applications to 1,688 thousand applications, higher than the expectations at 1,663 thousand applications.

This came in conjunction with the release of the Philadelphia Manufacturing Index, which showed a contraction of 9.4 to 12.9 in November, above expectations of a 15.1% gain, leading to a 0.2% reading versus 0.3% decline. Last October, outperforming expectations for stability at zero levels.

This comes hours after the FOMC meeting of 18-19 December and the press conference held by Federal Reserve Governor Jerome Powell in Washington following the Committee's decision to raise interest rates by 25 basis points for the fourth time this year to 2.25% And 2.50% and move forward in reducing the repurchase of government bonds and mortgage bonds by $ 50 billion per month.

Technical Analysis

GBP / USD remains stuck between the confirmation levels of 1.2636 and 1.2725 support, as the price needs to break through one of these levels to further define its next direction, making us remain neutral so far.

A break of the aforementioned support will reactivate the bearish scenario with its first target at 1.2500, while breaching the resistance will lead the price to gains starting at 1.2800 and extending to 1.2962.

The trading range for today is expected among 1.2550 support and 1.2750 resistance

Support and resistance:

Support: 1.2586-1.2636-1.2495

Resistance: 1.2713-1.2800-1.2875

The expected general trend for today: depends on the levels mentioned in the report