In March, we have observed a consolidation in the rates that previously took place within the uptrend. At this time, the pound is under pressure due to failures in the vaccination process, as the British AstraZeneca vaccine was at the center of a scandal and was threatened with a ban. There have also been disruptions in the supply of vaccines that are actually produced outside the UK. Nevertheless, they achieved good results on this issue: half of the population is vaccinated, which means that the development of a pandemic should not threaten the British economy.
Macroeconomic indicators already show a decline in unemployment to 5%, and an increase in manufacturing activity to the highest level in 40 months. Disappointing developments in the economy remain a record increase in the budget gap and a slowdown in the rate of inflation growth to 0.4%. The Bank of England kept the rate unchanged, and also maintained the pace of bond purchases.
The situation in the EU is also improving. Macroeconomic indicators in the euro area show an increase in business activity and the development of a surplus. For the pound, this will always be very important because the UK exports a significant part of its products to the EU.
Thus, we can see that despite the consolidation, there are many factors in the market that support the pound. However, at the moment, the market is experiencing an increase in the demand for safe assets, still due to the tense situation with the coronavirus. We believe that the rates will return to growth next month and in the long term, it is possible to open the deals to Buy. Technical analysis tools indicate the effectiveness of the deals to SELL. However, we believe that decrease will be very limited, and the rates are already near the support line. Therefore, our choice today are the deals to BUY. The entry points to the market can also be designated as the levels of 1.2771 and 1.2985, the overcoming of which can be a signal of the end of the consolidation period.
