Although the market is showing some activity, the pound sterling remains stagnant. The daily volatility reaches 100 pips, but the market is still hovering within a narrow range. The situation could be partially explained by the lack of important macroeconomic reports. The key reason is that traders are getting ready for Christmas. It is hardly possible that the situation will change. Today, the UK will disclose its public sector net borrowing data. The borrowings may drop by 12.3 billion pounds. However, the report is unlikely to make the market move. In any case, the UK government debt is so small that the market will ignore the data.
Meanwhile, the pound/dollar pair has been trading along 1.2150 for three days already. Notably, most 4-hour candlesticks have the form of Doji. This fact points to uncertainty among traders. At the same time, this could be considered an accumulation process. Thus, we may see a sharp outgoing impulse.
On the four-hour chart, the RSI technical indicator is hovering in the lower area of 30/50, which points to traders' great interest in short positions. On the daily chart, the indicator is ignoring the current bounce off the peak of the uptrend. The quote is hovering in the upper area of the indicator.
On the four-hour chart, the Alligator's MAs are headed downwards, which corresponds to the bounce off the peak of the uptrend. On the daily chart, the MAs are headed upwards, which points to the upward movement.
Outlook
Limits of the sideways channel are temporally located at 1.2100 and 1.2230. Traders are focused on these levels. If the price settles beyond either limit of the range on the four-hour chart, we will see an outgoing impulse. In the event of this, traders may receive a technical signal of a rise in the volume of short or long positions depending on the direction of the outbreak.
In terms of the complex indicator analysis, we see that in the short-term and intraday periods, indicators are signaling mixed opportunities because of stagnation. In the mid-term period, the indicators are ignoring a local change in the price. A buy signal is still in force.