06.06.2023 09:12 AM
Hot forecast for GBP/USD on June 6, 2023

The overbought condition of the dollar has been discussed for a long time, especially considering that it has only worsened. It is clear that in such circumstances, the market will look for any reason for at least a minor correction. And the final data on business activity indices in the United States became such a reason, as they turned out to be slightly worse than preliminary estimates. The services PMI, for example, reached 54.9 points instead of 55.1 points. Meanwhile, the composite business activity index stood at 54.3 points, compared to the preliminary estimate of 54.5 points. Although the indices still showed growth, as the previous month's services business activity index was 53.6 points and the composite index was 53.4 points. However, even a slightly more modest growth of the indices was enough for the dollar to depreciate.

But let's be honest, the dollar is still significantly overbought, and the market will continue to seize any opportunity to further weaken the dollar. Today, the eurozone retail sales report could serve this purpose, as the pace of decline is expected to slow from -3.8% to -3.7%. Sure, it is not a big change, but yesterday even less than that was enough to cause a noticeable weakening of the dollar.

This image is no longer relevant

The GBP/USD pair, during its intense downward movement, almost reached the support level of 1.2350, and the volume of short positions decreased. As a result, the price rebounded, and the pound recovered following its recent decline.

On the four-hour chart, the RSI downwardly crossed the 50 middle line from below, indicating an increase in long positions.

On the same time frame, the Alligator's MAs are intersecting each other. This signal suggests the end of the downward cycle and a possible change in trading interests.


In this situation, keeping the price above the 1.2450 level allows for further growth, and the pound can continue to recover. Traders will consider a bearish scenario if the price falls below the 1.2400 level. In this case, the support level of 1.2350 will be hit again.

The complex indicator analysis in the short-term and intraday periods points to the pound's recovery process.

Dean Leo,
Analytical expert of InstaForex
© 2007-2023
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex always strives to help you
    fulfill your biggest dreams.
  • Chancy Deposit
    Deposit your account with $3,000 and get $3000 more!
    In September we raffle $3000 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.
  • 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.
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
  • 30% Bonus
    Receive a 30% bonus every time you top up your account

Recommended Stories

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