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For the fourth consecutive trading day, British pound extended its gains against the Norwegian krone in yesterday’s trading session. This happened despite a soft CPI report from the UK.
The pair reached an intraday high of 11.85 that aligned with the resistance level of the November 6 high but gave back most of its gains in the afternoon and Asian sessions. As of 7:00 a.m. London time, sterling traded at 11.80 against the krone.
The UK election campaign is heating up, but not everything is going as planned for the Conservative’s leader Boris Johnson. Just as he insisted that his country’s future was in green investments and electric cars, the US giant Tesla Inc. announced that they had chosen to build their gigafactory in Germany and not the UK as previously planned. “Brexit is just too risky”, said Tesla’s Elon Musk.
Nevertheless, most polls give the Conservatives a comfortable advantage over their political competitors. Voters seem to prefer Boris Johnson over Labour Party leader Corbyn as UK’s prime minister.
After a lower-than-expected CPI number released yesterday, investors are now awaiting the UK’s retail sales report to assess the future direction of the country’s economy. Retail sales are expected to rise by 0.2% in October after a flat reading the previous month.
While technical levels show a resistance level at yesterday’s high of 11.85, newsflow around Brexit and the election campaign will likely keep moving the pair in the mid-term. A break above 11.85 doesn’t see any meaningful resistance before the 11.90 — the upper triangle line.
To the downside, the November 7 low of 11.62 could act as an important hurdle for sellers to push the price further down.
