© Dukascopy Bank SA
The second most traded currency pair seems to be forming a sideways movement. Overall, the pair started its decline on Tuesday, after data showed that economic growth in the UK slowed at a faster than expected rate in the third quarter. Economic growth in the United Kingdom grew 0.5% in the third quarter, down from 0.7% in the previous quarter and shy of a forecast for 0.6% growth. Meanwhile, manufacturing and construction contracted more than expected while services grew 0.7%, up from 0.6% in the previous quarter. However, the Dollar fell against the other major currencies on Friday as investors took profits in the wake of a rally after the Federal Reserve indicated that it could raise interest rates at its December meeting.
Our respondents, in turn, do not believe that pair will decrease and claim that the closing level will persist during the whole week. Nonetheless, 71% of opened positions are positive, while 28% of voters believe the pair will depreciate, hence, we should not exclude a possible movement even lower. Some of the traders have already claimed for a steeper decline this week. "As I see, this pair has been moving in a range but the upside breakout attempt failed on Friday. Therefore, the price should go back to find a strong support level (1.53240) for an other upside breakout attempt or it can be continue the bearish movement if the support level cannot hold the price against the bearish pressure." said csan86. Another trader, Jignesh, supports another opinion and states that "The GBP looked it was ready to fall into free fall mode last week, but critical support at 1.5233 spurred buyers which kept the pair alive."
An abundance of fundamental data both from the UK and the world's largest economy can add more liquidity into markets.
© Dukascopy Bank SA