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In general, the pound recalls Brexit if nothing happens in the market. Although throughout yesterday, the pound was growing not only because of the expectation of the next statements on this issue. Macroeconomic statistics slightly helped. Another thing is that usually no one looks at this data at all. So, yes, the main driving force was Brexit. Moreover, yesterday there was an informal meeting of negotiators from both sides, about which they even began to joke around. They say that a couple of weeks ago, rumors leaked that Brussels is allegedly ready to make concessions on such an extremely important issue as fishing, and the meeting was held in the form of a dinner at which fish dishes were served. And the English press thinks it's very funny. In short, market participants were waiting for some more loud statements about the next breakthroughs and that the agreement will be signed any day. That's what everyone's been talking about for the past few weeks. However, it would be better not to comment, because British Prime Minister Boris Johnson said that the UK is ready to leave the European Union without a trade agreement. In other words, the prime minister of the United Kingdom has literally crossed out everything that has been said and done for at least the past month with a single phrase. Maybe even a couple of years. And most importantly, many investors now feel like complete fools, because their optimism about the pound was based on the fact that London and Brussels finally agreed on something and will be able to avoid the fact that events will develop in the worst-case scenario. But so far, this has only led to the fact that the pound has once again stood still. Investors need to make sense of what is happening.
If we look at the statistics, it can be pleasing. According to Halifax, the rate of house price growth in the UK slowed from 2.6% to 2.5%. The good news is that it was forecast to slow down to 2.0%. Well, the most important thing in this news is that these data have almost no effect on the market. Halifax data does not cover the entire housing market, but only part of it. So it is not possible to draw conclusions about the state of the real estate market in the United Kingdom from these data.
Halifax house price index (United Kingdom):
The JOLTS data on the number of open vacancies in the United States is in about the same position now. After all, the content of the latest report of the United States Department of Labor is such that all indirect data on this very labor market and want to be interpreted exclusively in a positive way. It is not clear what we could do with them. So this time, it is unclear how we should perceive the growth in the number of open vacancies from 4,996,000 to 5,397,000. On the one hand, this may be due to the fact that employers are beginning to gradually recover from the long stagnation they were in due to restrictive measures in the case of the coronavirus epidemic, and are actively looking for additional employees. On the other hand, this may be due to the fact that employers, seeing what a mess is going on in the labor market and how many unemployed people are now divorced, decided to lay off some employees in order to recruit new ones, but with lower salaries. In general, it is not clear exactly how we should treat this data. And to be fair, it should be noted that the market ignored these data as well.
Number of open vacancies JOLTS (United States):
The macroeconomic calendar is completely empty today, so market participants can only comprehend Johnson's words regarding the trade deal with the European Union. His words clearly did not please anyone. So the prospects for the pound's growth look extremely vague.
In terms of technical analysis, we see a rapid upward move, which led to the breakout of the upper limit of the variable flat of 1.2440/1.2530, as a result of which the quote reached the value of 1.2590. Market participants did not succeed in holding new highs, and immediately a pullback emerged in the direction of the previously passed border.
With respect to volatility, a high speculative interest is recorded, on the basis of which local jumps in the market arise.
Looking at the trading chart in general terms, the daily period, you can see that the high activity in the market did not affect the overall dynamics, which has been keeping the quote in the side band for more than two months.
It can be assumed that if the price is pinned below 1.2530, another downward spiral of short positions will open, which will return the quote to the values of 1.2500-1.2480.
An alternative scenario considers a variable oscillation within the values of 1.2530/1.2600.
From the point of view of a complex indicator analysis, it can be seen that the indicators of technical instruments on hourly and daily periods signal a purchase due to a surge in activity during the past day. If the price is consolidated below 1.2530, the indicators on the minute and hour intervals will indicate a sell signal.
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