Although the market is focusing on the FOMC meeting, it still can't ignore macro data. The United Kingdom saw its retail sales decrease by 5.4% in August, worse than market expectations of a 4.2% drop. The country is rapidly sliding into a recession. The pound extends the bear run.

United Kingdom Retail Sales:

Today will be a calm day in the market due to a completely empty macroeconomic calendar. With the FOMC meeting looming – it is scheduled for Wednesday – the market is likely to trade sideways for a few days if nothing extraordinary happens, of course.

GBP/USD hit its swing low on Friday and then fell to the 1985 levels. The overheating of short positions triggered a technical correction of about 90 pips.

The Relative Strength Index crossed the oversold line of 30 to the upside on the 4-hour chart, signaling the overheating of short positions. A technical correction occurred. On the daily chart, the indicator is moving between 30 and 50, reflecting a strong bearish bias.

There is no crossover of the Alligator's moving averages (MA) on the 4-hour chart. On the daily chart, the Alligator shows the downtrend. Its MAs are not interlaced.

In the daily time frame, the bear trend is getting deeper.

Outlook

Despite the correction, the pound sterling is still overbought. In this light, if the quote goes above 1.1450, GBP will recover.

At the same time, a sideways movement began when the price reached the swing low. Therefore, speculators may well ignore all the technical signals that are now coming. In such a case, the volume of short positions could increase if the pair consolidates below 1.1350.

As for complex indicator analysis, there is a buy signal for short-term trading. Indicators also signal the downtrend in the medium term and intraday.