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British pound was mostly unchanged to slightly lower against the Norwegian krone during the Asian session, after printing an indecisive candlestick pattern in yesterday’s trade. The pound has been consolidating recent gains as markets continue to assess possible outcome scenarios of the December general election.
The election campaign is heating up after the dramatic head-on-head debate between Labour leader Corbyn and Prime Minister Johnson earlier this week. After promises to tax the rich and nationalize some of the largest UK utility companies, delivering a fast Brexit and cut taxes for working people, the two main candidates have now confronted about the housing market.
Johnson’s Conservatives announced plans to introduce a land tax surcharge for foreign buyers on the UK housing market in an effort to keep prices under control by damping foreign demand in the overheating housing sector. The Labour Party, on the other hand, promised to build at least 150,000 units of social homes per year.
The UK is releasing the Flash Manufacturing and Flash Services PMIs for November today. Markets forecast a slight fall in manufacturing activity, down to 48.8 points from the previous month’s 48.6 reading, and a modest rise in the services sector from 50.0 in October to 50.1 in November. We don’t believe the PMI reports will have a substantial impact on the pound given the focus on the general election.
Technicals show that the GBP/NOK pair is having difficulties to break above the horizontal resistance at 11.84 that also aligns with the 61.8% Fib level. Each breakout above 11.84 in the last few weeks has attracted sellers who have pushed the price back lower.
Yesterday’s low of 11.7750 acts as a short-term support level, followed by the November 15 low of 11.70.
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