The last trading day of last week was accompanied by a rapid fall for the Pound, which I want to associate with the publication of macroeconomic statistics in the United Kingdom and the United States. But this is not entirely true. The fact is that the Pound fell in price throughout the day while the data was published at the opening of the European and American sessions and there is quite a lot of time between them. Moreover, we cannot say that the British statistics were negative and the American statistics were extremely positive. It is because the Pound is overbought. The market has long been looking for reasons for correction.
British statistics came out worse than forecasts. However, they were still rather positive. The rate of decline in industrial production was expected to slow from -5.8% to -4.4% when in reality, they slowed to -4.7%. This is a positive factor.
Industrial Production (UK):
The American statistics were rather neutral as the data came out in different directions. In the UK, the rate of decline in industrial production slowed from -5.4% to -3.6%, which was much better than the forecast of -4.6%. At the same time, data on retail sales were published, which turned out to be significantly worse than forecasts. They were expected to slow down from 3.7% to 3.6%, but they slowed to 2.9%.
Industrial production (United States):
The GBP/USD currency pair made repeated attempts to break through the area of the local maximum of the medium-term uptrend of 1.3690/1.3710 but instead entered the correction stage, holding the quote below the value of 1.3600.
Taking into account the scale of the upward movement, the existing correction is more similar to a pullback, thereby leaving sellers the opportunity for further weakening of the Pound.
Market activity is having a positive trend which is confirmed by the speculative behavior of the price in the market.
If we proceed from the current location of the quote, we can see a rapid downward movement that began last Friday.
Considering the trading chart in general terms, in the daily period, it is worth highlighting the medium-term uptrend where the quote develops at the peak.
If the price is kept lower than 1.3550, we can assume that the quote will continue to decline in the direction of the values of 1.3500-1.3450, eventually concentrating on the basis of the previous week.
From the point of view of the complex indicator analysis, it can be seen that technical instruments on the minute, hourly, and daily periods signal a sale due to a downward move from the peak of the medium-term trend.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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