FX.co ★ Hot forecast for GBP/USD on August 21, 2023

Retail sales in the UK shrank lower to -3.2% from -1.6%, much worse than the forecast for a decrease to -1.9%. Still, the pound sterling remained stiff. Therefore, the market prefers to neglect any macroeconomic data. Moreover, the economic calendar is absolutely empty until Thursday. Besides, the market will adjust sentiment not to statistics but to statements made in the annual symposium at Jackson Hole. All in all, the market is set to tread water for the most part of the week.

GBP/USD has been firmly locked in a sideways channel for three weeks in a row. Such developments indicate the ongoing correctional move which has been unfolding from the high of the medium-term trend.

The RSI technical instrument is hovering at around the average level of 50 on the 4-hour chart. It means a flat market.

The H4 Alligator is generating a faint signal, i.e. moving averages are behaving as appropriate along the borders of the flat market.

Outlook and trading tips

Under current market conditions, speculators are keeping close tabs on the borders of the sideways channel. Indeed, once the price goes beyond the borders of trading range, it means that the balance of trading forces will shift in a particular direction.

The bearish scenario will come in play in case the price settles below 1.2650. This move will extend the downward correction.

The bullish scenario suggests that GBP/USD will recover after the ongoing correctional cycle. The instrument will generate the first technical signal of an upward move after the price settles above 1.2800.

Complex indicator analysis provides a mixed signal in the short- and long-term timeframes due to a prolonged trading range.