Pound Sterling Fails To Rebound
2022.04.07 13:06
Yesterday, at the beginning of the day, the pound sterling displayed signs of a rebound against the US dollar, but to no avail. The British currency showed an insignificant rise and returned to its previous levels. This scenario is similar to what we saw during the previous two days. The only difference is that the pound sterling rose during the European session instead of remaining stagnant. However, just after the beginning of the US trade, the currency lost value.
Since we have been witnessing such a situation for several days in a row, we may notice that traders manifest different attitudes to the current state of affairs. While European traders, including British ones, are puzzled, traders from the US have completely lost their interest in the European currencies.
Today, we may see the same picture. However, the pound sterling will hardly show a rise during the European session. Yesterday, the British currency followed the euro, which was boosted by the EU’s refusal to impose sanctions against Russian energy sources. Meanwhile, the US unemployment claims data will hardly affect the market sentiment. The number of first-time claims may advance by 3,000, whereas the number of continuing claims may increase by 8 thousand. The changes are expected to be insignificant.
US continuing claims.
Yesterday, the pound/dollar pair was not active and returned to the lower limit of the earlier broken range of 1.3105/1.3180. This movement allows traders to use either a breakout or a rebound strategy. In this case, the lower limit of the range acts as resistance.
On the four-hour chart, the RSI technical indicator is moving in the lower area of the range of 30/50, thus reflecting traders’ great interest in short positions. In the same period, Alligator’s moving averages are headed downward, thus proving a sell signal.
Outlook
Under the existing conditions, a decline in the pound/dollar pair became slower. The area of 1.3050/1.3060 is serving as support. If the price settles below the mentioned area, it may drop to at least the support level of 1.3000. Until then, the pair is likely to hover within 1.3050/1.3105.
In terms of the complex indicator analysis, we see that technical indicators are signaling mixed opportunities in the short-term and intraday periods amid stagnation. In the mid-term period, technical indicators provide sell signals due to the downtrend.
GBP/USD 4-hour chart.
