In general, the course of yesterday's trading resembled that of Friday's, like it was almost imitating it. If on Friday, the dollar initially lost its positions and then rebounded, then yesterday, it initially strengthened. Moreover, even the range of fluctuations was similar. All of this happened while the economic calendar was empty. However, today the situation is somewhat different, as the first estimate of the eurozone GDP for the fourth quarter will be released. The first estimate, in particular, has the greatest impact, as subsequent estimates either confirm it or only provide minor adjustments. Considering that, according to forecasts, the pace of economic growth in Europe is expected to increase from 0.0% to 0.1%, the single currency may show some growth, pulling the pound along with it.
The seven-week sideways channel of 1.2600/1.2800 continued to attract market participants. We have not observed any crucial changes in the market, including an increase in volatility. The quote is moving along the middle level of the channel at 1.2700.
The RSI technical instrument is hovering at around the average level of 50 on the 4-hour chart. It means a flat market.
On the same time frame, the Alligator's MAs are intersecting each other, confirming the current sideways market.
OutlookIf we consider the leverage theory, the prolonged formation of a sideways channel will eventually lead to an increase in volatility. As a result, speculators will breach one of the channel's boundaries, indicating the quote's subsequent path. However, at the moment, the quote is moving along the middle level of 1.2700. Therefore, first and foremost, a new cycle within the channel will be formed, and only after that will we consider a breakout.
The complex indicator analysis suggests an upward cycle in the short-term and intraday periods.