Against the background of a completely empty macroeconomic calendar, the pound showed an extremely restrained growth, which was more like a purely technical rebound after several days of steady decline. But unlike yesterday, the pound today can get the most serious support in the form of data on inflation that can grow from 0.3% to 0.6%. In the context of growing dissatisfaction of British business with the trade agreement signed at the end of last year between London and Brussels, it is logical to expect the Bank of England to further ease its monetary policy up to a reduction in the refinancing rate. But the rise in inflation may lead to the fact that this decision will be postponed, at least until the end of February. By that time, the situation may change so much that the British regulator will not need to take such measures at all. So, the pound has reason to be optimistic if the forecasts for inflation are confirmed.
Since the beginning of the trading week, the GBP/USD currency pair has been following the recovery path relative to the decline of 1.3708 - - - > 1.3519, where market participants have already managed to return the quote higher than 1.2650, which means a recovery of over 70%.
The market dynamics at the same time slipped to the lowest level in recent times as the average daily indicator does not exceed 100 points.
If we proceed from the current position of the quote, then the upward inertial move is clearly visible, which may well lead us to a local maximum.
Looking at the daily period trading chart, in general terms, it is clear that the quote is still at the conditional peak of the medium-term uptrend.
We can assume that taking into account of the current inertial movement, we are waiting for another touch of the resistance area of the medium-term uptrend of 1.3690/1.3710, where we should expect a slowdown followed by a rebound.
From the point of view of a comprehensive indicator analysis, it can be seen that technical instruments on the hourly and daily periods are giving signal for a purchase due to the price movement at the conditional peak of the trend.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.