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Yesterday's speculative hype around the pound was tossed from side to side endlessly. During the start of the Asian session, the pound sharply ascended, rising to another multi-year high. However, it slowly fell at the opening of the European session, completely recouping the growth from the Asian session. This was more like a light technical correction, after reaching the next high. Such an idea was confirmed by the next growth, which began after the European session closed. This means that speculators are ready to reach new highs. It should be noted that all these movements took place against a completely empty background. Of course, a lot of Fed's representatives made a speech yesterday, and data on new home sales in the United States were also published. However, all the changes in the direction of the pound's movement do not coincide with these very interesting and significant events in any way.
In general, the representatives of the FRS did not say anything important at all. It was just the fake official rhetoric. Thus, the following outlook appears – the pound rose to another high, followed by a slight rebound, and then continued its growth. Accordingly, it will continue to ignore any news and facts, but still rise. Therefore, we can say that this growth is purely speculative. The only question is what exactly will be the reason for its collapse? There is no doubt that such a collapse should happen. But so far, there are no current reasons that could trigger this process.
After a slight pullback from the local high of 1.4224, the GBP/USD pair returned to the upward trend, recovering most of its losses. The speculative hype ignores the high level of overbought of the British currency, which might eventually result in an uncontrolled corrective move at the time of fixing long positions.
The market dynamics has a volume slightly above the daily average. But in this case, the inertially speculative course of the price is highlighted.
Based on the quote's current location, there are only 60 points remaining to update the local high. We do not exclude further growth, although the pound's overbought status is noticeably higher.
Considering the general trading chart, the daily period, one can see that the quote is moving at the high of the medium-term trend.
We can assume that speculators will continue their inertial movement if the price holds above 1.4230 level. The target will be the area of the 2018 high.
Traders consider an alternative scenario of market development almost on a daily basis, due to the pound's high level of overboughtness. So, market participants are waiting for the inertia to be over in order to start the correction stage.
From the viewpoint of comprehensive indicator analysis, it shows that the indicators of technical instruments unanimously signal a buy, due to price fluctuations at the high 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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