empty
 
 
13.01.2023 08:20 AM
GBP/USD: Breaking forecast on January 13, 2023

The United States saw a slowdown in the inflation rate to 6.5% from 7.1%. The reading came better than the expected 6.7%. Indeed, consumer prices are falling steadily, paving the way for a greater reduction in the pace of rate hikes. It seems that the Fed will raise interest rates by just 25 basis points at the coming meeting. Notably, the pound showed modest growth against the greenback after the publication. Earlier, it had surged on Chair Powell's statement about a slowing in the pace of rate increases. All in all, fresh inflation data confirmed those assumptions that contributed to the weakening of the US dollar.

United States Inflation Rate:

This image is no longer relevant

The fact that the pound is overbought is limiting the pair's upside potential. This means that the market may enter a correction once there is a reason for that. In fact, a correction may occur already today when the UK delivers its industrial production statistics. The reading is estimated to accelerate to -2.8% versus -2.4%, which could become another proof of a recession in the country. Therefore, the pound is unlikely to strengthen.

United Kingdom Industrial Production:

This image is no longer relevant

The GBP/USD pair updated the swing high. It briefly went above the 1.2200 mark but then reversed, which illustrates that the pair is overbought.

The RSI bounced off the overbought level on the 4-hour chart after updating the swing high. The indicator is now moving down to line 50, signaling a pullback.

The Alligator's MAs are headed up on the 4-hour and daily charts, indicating a bull market.

Outlook

The quote is likely to fall to 1.2150. It will become clear what traders are going to do next once the level is reached. In other words, the uptrend may continue but with a corrective move within.

This image is no longer relevant

The uptrend will go on if the price updates the high and consolidates above 1.2250.

A downtrend could emerge once the quote falls below 1.2150 and then settles below 1.2100.

Complex indicator analysis shows the possibility of a pullback in the short term as well as an uptrend in the medium term and intraday.

Dean Leo,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $1000 more!
    In June we raffle $1000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback