The consolidation in the rates continues in the range of 1.1616-1.2224 CHF. At the same time, we observe an approach towards the maximum. The rates were hugher than now only in March, until the moment when the lockdown in Europe began negatively affecting the global economy. The endless Brexit negotiations also negatively affect the pound, and its strengthening in November is directly related to the next round of negotiations on a trade deal with the EU, which should be the final one, because only one month left for achieving the deal. Recent reports on the perspectives for a deal generally give some hope to investors, although there are serious disagreements on several issues. However, investors are counting on a positive outcome. Therefore, there is every chance that the rates will still break through the resistance line and reach new highs.
The latest macroeconomic reports on the British economy do not put pressure on the pound: business activity in the manufacturing sector recovered in November, as it did in the neighboring EU, and only the services sector remains under pressure, being the most affected one by quarantine restrictions. News of successful vaccine trials also works in favor of the pound, pushing the rates up.
In this situation, the probability of testing a new maximum is very high. At the same time, a price correction is not excluded, as indicated by the Stochastic oscillator. However, most of the technical analysis tools indicate that the deals to Buy would be the most effective. Therefore, we should focus on the entry point at the level of 1.2224, which may well be reached within a month, in the event of a deal between the United Kingdom and the EU, although buy orders can be opened right now, in long-term trading with the readiness for a drawdown. The deals to SELL can only be profitable in short-term trading, until the end of the week.
