It is clear that the market focused solely on the results of the meeting of the Board of the European Central Bank and the subsequent press conference of ECB President Christine Lagarde. So the pound behaved exactly like the single currency. There is nothing surprising. The only strange thing is that at first the dollar rose in price, and began to grow only in the Asian session. Although the ECB has not only raised the refinancing rate by 75 basis points. Lagarde, in general, announced that at least one more such hike is possible if inflation does not start to slow down. And given the serious problems with energy sources, this is extremely unlikely. On the contrary, inflation will continue to rise. The realization of this fact did not happen immediately. At the same time, the dollar's initial growth is most likely due to the fact that the market was ready for such a large-scale increase in the refinancing rate. In addition, the dollar has noticeably weakened the day before. So the very fact of rising interest rates could not seriously affect the situation. Unlike Lagarde's press conference. But she expressed it so vaguely that market participants did not immediately understand what exactly she meant. At the same time, the market is likely to consolidate around the current values. Partly for the simple reason that the macroeconomic calendar is completely empty today. And in general, now it's the turn of the Federal Reserve, whose meeting will take place only in a week and a half. Until then, the market will remain close to the achieved values.
The GBPUSD currency pair, despite the speculative activity, repeats the price fluctuations of its counterpart in the EURUSD market. This is due to the positive correlation between trading instruments, where at this time the euro is considered the leading currency, and the pound is being driven.
The technical instrument RSI H4 crossed the middle line 50 upwards during the upward momentum, which indicates the formation of a correction from the local low of 2020. The indicator is currently at 60, which is the highest reading since August 11th.
Moving MA lines on the Alligator H4 indicator have a primary intersection between the green and red lines. This signal indicates a slowdown in the downward cycle. Alligator D1 is directed to the downside, which corresponds to the direction of the main trend.
Expectations and prospects
In this situation, the price rebound from the local low of 2020 led to the strengthening of the British currency by about 180 points. To move into the stage of a full correction, the quote needs to stay above the value of 1.1620 for at least a four-hour period.
Otherwise, the current ascending cycle may slow down, followed by a return to the support.
Comprehensive indicator analysis in the short-term and intraday periods is focused on an upward cycle - a signal to buy the pound. In the medium term, indicators point to a downward trend.