Pound Sterling Maintains Downtrend
2022.04.18 13:01
On Friday, trading floors in Europe and the US were closed to celebrate Good Friday. However, some currencies continued their movements. The pound sterling kept falling even though its decline was modest amid the Easter holiday.
Following the results of the last ECB meeting, analysts are sure that the US dollar will strengthen significantly, especially against the euro. As for the US dollar index, it is projected to gain momentum mainly versus the pound sterling.
US traders return to markets today, and this trend is likely to continue. During the European session, trading will be sluggish amid public holidays in Europe.
After a short-term consolidation near 1.3050, the GBP/USD pair took a nosedive to the main support level of 1.3000. It indicates the prevailing downtrend. The medium-term trend is sure to push the price to new lows eventually.
The RSI indicator closed below the 50 midline on the 4H chart. Now, the indicator is moving in the lower area, signaling an increase in the volume of short positions.
The Alligator indicator has an intersection between the moving averages on the 4H chart, indicating the correction’s completion. On the daily chart, it generates a sell signal. The moving averages are pointed downwards.
Outlook
Currently, the pair is hovering near the psychological level of 1.3000. It means that traders have considerably increased the volume of short positions after the recent correction. The main signal to sell the pound sterling will appear if the price fixes below 1.2950. If so, the medium-term downtrend will be prolonged.
Alternatively, the pair may settle at the 1.3000 level. Nevertheless, the sentiment will still be bearish. As a result, the pair will be able to halt its decline for some time. The complex indicator analysis gives a sell signal on the short, intraday, and medium-term charts due to the downward cycle.
EUR/USD 4-hour chart.
