An absolutely empty macroeconomic calendar boosted the oversold pound sterling. However, the currency showed only a small rise amid the possibility of a fully-fledged energy crisis in Europe. The EU economy may stagnate if the EU authorities refuse to buy Russian energy resources. Until the EU takes a decision on the issue, all European currencies will be under significant pressure, which is capping their upward potential.
Notably, the risk of a real energy crisis is so high that markets are almost ignoring statistical reports. Thus, the UK unemployment rate report, which unveiled a decline to 3.7% from 3.8%, had almost zero effect on the pound sterling. The currency remained at the same levels.
UK Unemployment Rate
However, the US statistical reports are likely to make the market move. In the US, the retail sales growth may slow down to 4.2% from 6.9%. In addition, a rise in industrial production is expected to slacken to 2.0% from 5.5%. In other words, worsening in the US macroeconomic reports is likely to lead to the US dollar depreciation.
US Retail Sales
The pound/dollar pair is climbing from the intermediate support level of 1.2155. The pound sterling has already managed to recoup some of its losses and become less oversold.
On the four-hour chart, the RSI technical indicator upwardly crosses the mid 50 line, thus proving the upward correction. At the moment, the indicator is moving in the upper area of 50/70. There are no overbought signals.
On the same time period, the Alligator's moving averages are intersecting each other, reflecting the correctional movement. On the daily chart, the Alligator indicator is signaling that the downtrend is still intact. The moving averages are heading downwards.
On the daily chart, we see a downtrend signal despite the existing correction.
Outlook
The correctional movement is still in force and the quote may return to 1.2380/1.2400. Notably, the structure of the downtrend will be intact.In terms of the complex indicator analysis, we see that technical indicators are signaling buy opportunities on the short-term and intraday periods amid the correctional movement. On mid-term period, the indicator is providing sell signals due to the main trend.