Futures jump as oil plunge eases rate fears and focus turns to mega-cap earnings
Even though the monthly GDP in the UK rose in October and gave the quid some short term support, the impact of strikes in the UK’s rail sector and postal service threatening to disrupt business profits during the festive period, slowed down the bullish momentum. Further major losses were prevented throughout last week by market confidence of a 50 bps rate hike from the Bank of England (BoE) on Thursday.
On the technical analysis point of view the price is trading in a steady uptrend for the last month and it is currently at the $1.22800 area after finding resistance on the upper band of the Bollinger bands. With major economic news coming up and with the Stochastic indicator in the overbought level for almost a month, it is possible to see a correction to the downside before resuming the bullish movement. If this scenario is confirmed then we might see some support around the $1.18800 area which is just below the 23.6% of the daily Fibonacci retracement level, the lower band of the Bollinger bands and also a point on the daily bullish trendline.
If we witness a continuation to the upside after the publications we might expect some resistance around the $1.26470 area which is a strong inside resistance level since late May 2022. Any trading initiated is advised to take extreme caution and give priority to risk assessment and money management rules beforehand.
