Summary:
-
GBPUSD surges up through $1.30
-
Tory lead holding in polls
-
Service sector PMI improves from flash reading
The pound has made a break higher above the $1.30 handle, running up to levels not seen since May. The lead for the Conservatives seems to be holding at around 10 percentage points and unless this narrows in the next week then it is looking increasingly likely that we will get a Tory majority.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appH4
GBPUSD has made a strong push higher this morning and in doing so the market has broken above both the psychological $1.30 level as well as prior resistance around 1.3010. Source: xStation
D1
The move can be put into context better from a longer-term perspective with the breakout seemingly ending a 7-week consolidation and seeing price move up to a 7-month high. Prior resistance around 1.3010 can now be viewed as possible support. Source: xStation
There’s also been some positive data out from the UK that will likely serve to support these gains with the services reading for November being revised up to 49.3 from 48.6 previously (in the flash reading. The prior month showed 50.0.) This is the 2nd month running that this indicator has topped estimates but it is also the 2nd time in 3 releases that it is below the 50 mark and therefore signalling contraction.
The Services PMI continues to point to a subdued level of activity and while it was revised higher from the flash reading a couple of weeks ago, this is still in keeping with a subdued level of activity. Source: Bloomberg
As the last of 3 keenly viewed industry surveys in the past 3 days this rounds of the latest batch of leading indicators on the UK economy, leaving an overall impression of a slight improvement against a pessimistic backdrop, with activity on the whole remaining at subdued levels.
US-China moving closer to a deal?
There’s been a flurry of activity across several markets after some upbeat reports on the trade front. Citing people familiar with the matter the US and China are said to be moving closer to a trade deal despite the heated rhetoric and the news caused a near immediate reaction in the markets with European stocks and US futures surging higher. The impact can also be felt in the fixed income space with bond yields rising and safe haven markets such as Gold have moved lower. The recent price action continues to demonstrate how sensitive the markets are to any trade-related news and this will likely remain the case heading into December 15th deadline where additional tariffs are set to be slapped on if an agreement can’t be reached.
The FTSE has moved off its recent lows on the trade news but remains firmly lower in recent sessions after price once more failed to break above the 7450 resistance last week. The market has found a little bit of support around the mid-October lows of 7135. Source: xStation
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
