FX.co ★ Forecast for GBP/USD on February 12

Frankly speaking, the decline in GBP / USD yesterday was nothing, especially since the dollar did not really strengthen in the market. Yes, jobless claims in the US have decreased, but it happened only because there was a major revision in the previous data. Initial claims were revised from 779,000 to 812,000, while repeated claims changed from 4,592,000 to 4,690,000. Then, after that, initial claims dropped to 793,000 instead of 750,000, while repeated claims fell to 4,545,000 instead of 4,451,000. In other words, the data came out much worse than expected, thereby limiting the upward potential of USD.

Jobless claims (United States):

Therefore, today, despite the long-overdue correction, pound is likely to rise again, perhaps even to new all-time highs. To add to that, economic situation in the UK is improving. In fact, 4th quarter GDP is likely to show slower decline from -8.6% to -8.0%. The rate of decline in industrial production may also slow from -4.7% to -4.2%.

But of course, the scale of the recession is much more serious than in Europe or the United States. Industries were declining for almost two years now, long before the COVID-19 pandemic. Nevertheless, the market will take the slowdown as positive, viewing it as an improvement in economic dynamics.

GDP growth rate (UK):

Yesterday, GBP/USD found resistance at 1.3865, relative to which there was a slowdown and then a pullback.

Clearly, the currency is already overbought, but speculative interest prevails in the market, which may accordingly lead to further growth.

At the same time, market dynamics are not so high, as if there is an impending accumulation of trading volumes.

And based on the current price, there was a pullback from the local high, the scale of which is 79 pips.

The daily chart also shows that there is a strong upward move, and it seems that it will not stop yet.

Of course, a technical correction usually follows this scenario, however, because of the current speculative activity, there is a high chance that GBP/USD will continue to trade upwards, exacerbating the already difficult situation in the market.

So, in case the quote moves above 1.3865, speculators will surely push the price towards 1.3900-1.3950.

At the same time, according to indicator analysis, H1 and D1 time frames are signaling BUY, mainly due to the upward movement towards the highs. Meanwhile, the M15 TF signals SELL due to the pullback from the local high.