Amid disappointing macroeconomic data on Thursday, the pound sterling failed to enter a correction. Meanwhile, nothing prevented the currency from rising on Friday. What is more, GBP is expected to extend gains on expectations of bullish EUR that was flat despite strong industrial production results in the eurozone. The euro's growth was restrained due to the escalation of tension between the European Union and the Republic of Belarus. The situation is so tense that Brussels threatened to impose new sanctions. Minsk, in turn, promised to cut off gas supplies to Europe through its territory. Natural gas shortages are still a burning issue in the EU. However, the situation somewhat stabilized at the weekend. The parties no longer made harsh statements, and their rhetoric became more restrained. That is why if political tension continues to ease, the euro will be able to enter a correction and, through the US dollar index, push the pound sterling.
After a strong downward movement, the sterling bounced upward, with the pivot point seen at 1.3350.
The Relative Strength Index (RSI) is in the oversold zone on the H4 chart.
On the daily chart, a change in the mid-term trend is seen, with a possibility of a 10% decrease in the value of the pound.
Outlook:
The quote is currently bouncing upward, with resistance seen at 23.6 and 38.2 Fibonacci levels. In case of consolidation below 1.3400, the volume of short positions is likely to increase.
In terms of complex indicator analysis, there is a buy signal for short-term and intraday trading due to a technical correction.
