Current trend

The GBP/USD pair is trading with near-zero dynamics, holding close to 1.3040. The "bulls" are maintaining the upward momentum formed at the end of last week, but expect new drivers to emerge this week. Last Friday, the British currency received significant support from September data on Retail Sales: in annual terms, the indicator accelerated from 2.3% to 3.9% with a forecast of 3.2%, and in monthly terms, it fell from 1.0% to 0.3%, while analysts expected –0.3%. In turn, the indicator excluding fuel increased from 2.2% to 4.0%, with preliminary estimates of 3.2%.

The pound has been under pressure at the start of the week following the release of macroeconomic statistics on Rightmove House Price Index: the index slowed in October from 1.2% to 1.0% year-on-year and from 0.8% to 0.3% month-on-month, which contributes to a further reduction in inflation risks in the country.

Tomorrow, Bank of England officials, including the Governor of the regulator, Andrew Bailey, will speak: it is expected that officials will advocate a further reduction in the cost of borrowing, given the sharp fall in inflation in the country, as well as the easing of monetary policy by the Bank of England's main competitors, the US Federal Reserve and the European Central Bank (ECB).

On Thursday, the UK will release data on business activity from S&P Global, with forecasts calling for a slowdown in the Manufacturing PMI from 51.5 points to 51.4 points, and in the Services PMI — from 52.4 points to 52.2 points.

Support and resistance

Bollinger Bands on a daily chart demonstrate a moderate decrease. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the ultra-short term. MACD is reversing into an upward plane, forming a new buy signal (the histogram is above the signal line). Stochastic is showing similar dynamics, developing uncertain growth and retreating from the level of "20", which signals the risks of the pound being oversold in the ultra-short term.

Resistance levels: 1.3050, 1.3100, 1.3150, 1.3200.

Support levels: 1.3000, 1.2948, 1.2900, 1.2860.

Trading tips

Long positions can be opened after a breakout of 1.3100 with the target of 1.3200. Stop-loss — 1.3050. Implementation time: 2-3 days.

The return of a "bearish" trend with the breakdown of 1.3000 may become a signal for new short positions with the target at 1.2900. Stop-loss — 1.3050.