The pound showed quite high activity yesterday, but without any visible result. At first, it actively declined, and then grew. As a result, returning to the original positions. The reason for all these movements can be safely called the data on the labor market, which somewhat surprised traders. And although the unemployment rate remained unchanged, employment decreased by 38,000. While expectations were for its growth by 75,000. However, gradually came the realization that the data is not so terrible. After all, the number of applications for unemployment benefits decreased by 32,000. And what is not unimportant is the average wage, the growth rate of which accelerated from 4.2% to 4.3%, with a forecast of 3.9%. So the data on the labor market leveled each other. It's just that this process has been stretched over time.
Unemployment Rate (UK):
Data on producer prices were published in the United States, the growth rate of which should have accelerated from 9.8% to 10.0%. But instead, they slowed down to 9.7%. However, after the Federal Reserve made it clear that an increase in interest rates is inevitable, the situation with inflation, and the producer price index is an integral part of it, is no longer of interest. So the data on producer prices in any case could not affect the market in any way.
Producer Price Index (United States):
But besides the producer price index, since the transition of the monetary authorities to tighten their policies and directly increase interest rates, inflation data has also lost relevance. Which will be published in the UK today. So the acceleration of consumer price growth from 5.4% to 5.5% is likely to go unnoticed.
Inflation (UK):
Data on industrial production will be published in the United States, the growth rate of which may slow down from 3.7% to 2.8%. But with all due respect to these data, from the point of view of financial markets, they are not of interest. But what interests investors is consumer activity. We are talking about retail sales, the growth rate of which should slow down from 16.9% to 15.0%. Given that consumer activity is the main engine of economic growth, the slowdown in retail sales growth is an extremely negative fact. However, due to the continuing effect of a low base, which is indicated simply by the growth figures, the annual data are still not entirely informative. So it's worth looking at the monthly. And judging by them, sales should grow by 1.5%. In other words, we are talking about the growth of consumer activity. So the growth of the dollar looks like a much more likely development of events.
Retail Sales (United States):
The GBPUSD currency pair, despite a local surge in activity, still remains within the limits of the horizontal channel at 1.3500/1.3600. A long-term movement of prices in a closed range signals the indecision of market participants to action. This, in turn, can lead to a process of accumulation of trading forces, which will provoke speculators to price jumps.
The RSI technical instrument in H4 and D1 is moving along the 50 line, confirming the stagnation in the market.
At the same time, the Alligator H4 indicator has an interlacing between the moving MA lines, which indicates a flat.
On the chart of the daily period, the sideways move led to a slowdown in the upward cycle from the end of January. This may signal a gradual change of trading interests.
Expectations and prospects:
In this situation, the tactics are based on the breakdown of the control values of the horizontal channel. This strategy may well point to the next path.
The following values serve as signal levels: 1.3630, when considering buy positions and 1.3480, in case of transition to the stage of downward interest recovery.
Complex indicator analysis has a variable signal in short-term and intraday periods due to the sideways price movement.