UK public sector borrowing was the fourth-highest on record for October, according to the GBP projection.

Market Analytics and Technical Considerations

• UK government debt is still very high.
• Later on today, speakers from the Fed are scheduled.
• Potential emergence of a symmetrical triangle

GBP/USD BASELINE BACKGROUND

The UK public sector (read economic calendar under) spent more money in October than it brought in, ranking fourth in monthly indebtedness. Raising interest rates to make up for the risk of default to investors is the normal economic response to high levels of debt. Because interest rates and come with a higher have historically correlated positively, the sterling’s immediate response was to move somewhat higher. In light of the recessionary risks and current high rates, further assertive interest rate increases are unsustainable for the UK economy.

The majority of the speakers scheduled for later today are Fed officials, with Mr. Bullard being the most assertive and likely to continue the recent hardline rhetoric. Given the ongoing concerns over the UK’s public finances, this could lead to further depreciation in GBP/USD.

Technical Analytics and Parameters

Daily GBP/USD price changes has been moving inside of a growing triangle formation and is preparing to burst out soon. The 1.1738 swing low and beyond are where the fundamentals point to a push below the triangle’s support, but they might be disproven by a less likely candle’s closure well above triangle’s barrier.