Yesterday's trading began with a slight increase in the pound, which was pulled by the single European currency. It itself grew against the backdrop of the final data on inflation, which turned out to be slightly better than the preliminary estimate. But after the opening of the US trading session, the direction of movement turned around one hundred and eighty degrees, and by the end of the day, the pound even fell slightly. The reason was the data on applications for unemployment benefits in the United States. Of course, the number of initial calls, which should have decreased by 6,000, decreased by only 2,000. Only the number of repeat calls decreased by 58,000 against the forecast of 15,000. So the overall decrease turned out to be much larger than expected. And this once again showed that the American labor market continues to actively improve.
Number of retries for unemployment benefits (United States):
Today's trading immediately began with a noticeable weakening of the pound, which was the result of investors' reaction to the extremely weak data on retail sales in the UK. Their growth rates literally collapsed from 7.0% to 0.7%. And this despite the fact that even the most pessimistic forecasts predicted a slowdown to 2.8%. But for the pound, everything is just beginning, because soon the pressure on it will be exerted by preliminary estimates of business activity indices, which, without exception, should all decline. In particular, the manufacturing index may fall from 55.2 points to 54.8 points. The index of business activity in the services sector may decrease from 62.6 points to 58.9 points. So the composite index of business activity will decrease from 60.9 points to 59.6 points.
Retail Sales (UK):
But for the United States, the outlook is no better. The index of business activity in the manufacturing sector should decrease from 58.8 points to 58.0 points. The index of business activity in the services sector may fall from 58.0 points to 57.0 points. The result of all this will be a decrease in the composite index of business activity from 57.7 points to 57.0 points. So closer to the close of the trading week, the pound will be able to win back at least part of its losses.
Composite PMI (United States):
The GBPUSD currency pair was temporarily in the stage of a rollback from the support level of 1.3000. This led to a slight strengthening of the pound, but the price reversed in the area of 1.3080. As a result, the quote returned to the reference point, completing the rollback.
The technical instrument RSI H4 returned below the middle line 50, which confirms the pullback completion signal. D1 is still in the lower area of the 30/50 indicator. This move indicates the prevailing interest of traders in the downward trend.
The Alligator H4 indicator has a crossover between the MA moving lines, proving the completion of the upward movement. Alligator D1 indicates a medium-term downward trend.
Expectations and prospects:
The main support is the psychological level of 1.3000, which puts pressure on the bears. In order to confirm the signal about the prolongation of the medium-term downward trend, the quote needs to stay below 1.2900. Otherwise, it is impossible to exclude the repetition of the natural basis of the past, associated with the control level. This can lead to repeated rollback or stagnation.
Complex indicator analysis has a sell signal in the short, intraday and medium term due to the price approaching the control level.