The OECD revealed its intently watched financial outlook on Tuesday.
- Sell the GBP/USD pair and set a take-profit at 1.1645.
- Add a stop-loss at 1.1950.
- Timeline: 1-2 days.
- Set a buy-stop at 1.1920 and a take-profit at 1.200.
- Add a stop-loss at 1.1825.
The GBP/USD value moved sideways on Wednesday morning as merchants waited for the Federal Reserve minutes. It additionally reacted mildly to the newest OECD report on the state of the British economic system. The pair was buying and selling at 1.1870, which was barely under the year-to-date excessive of 1.2027.
FOMC minutes forward
The OECD revealed its intently watched financial outlook on Tuesday. The report warned that the British economic system would be the worst performing within the G20 after Russia. It expects thay the economic system will contract by 0.4% in 2023 after which rise by simply 0.2% in 2024.
The assertion additionally warned concerning the authorities’s stimulus bundle on power. Rishi Sunak’s administration has capped the common family power invoice to £2,500 till April. The OECD believes that the stimulus will result in larger rates of interest and authorities debt.
The assertion got here on the identical day that the UK revealed the newest public borrowing knowledge. Net borrowing elevated to £13.5 billion in October, the fourth greatest October borrowing on report. The quantity was nonetheless decrease than the median estimate of £22 billion. The authorities spent £76.5 billion in October and picked up £51.7 billion.
Therefore, the Bank of England (BoE) is at a tough place since inflation is hovering. It rose to 11.1% in October, the best level in over 40 years. The danger is that extra charge hikes when the UK goes by means of stagflation will make the scenario worse.
The subsequent key knowledge to observe would be the preliminary manufacturing and companies PMI numbers from the UK and the US. In the UK, economists count on the information to point out that the manufacturing PMI dropped to 45.7 in November whereas the companies determine fell to 48. In the US, analysts count on that manufacturing PMI dropped to 50.
The GBP/USD value may even react to the newest American sturdy items orders, new house gross sales numbers, and the FOMC minutes.
The GBP/USD value has been in a consolidation section previously few days. In this era, it has remained between the necessary resistance degree at 1.2027 and 1.1646. The two had been the best factors on October 26 and November 15. It can also be at the usual pivot level and is being supported by the 25-day and 50-day moving averages.
At the identical time, the MACD has shaped a bearish divergence sample. Therefore, the pair will possible retreat forward of the FOMC minutes. If this occurs, the following key help degree to observe shall be at 1.1645.