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FX.co ★ Forecast for GBP/USD on January 24. The pound has exhausted all its luck

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Forex Analysis:::2022-01-24T10:57:30

Forecast for GBP/USD on January 24. The pound has exhausted all its luck

Forecast for GBP/USD on January 24. The pound has exhausted all its luck

According to the hourly chart, the GBP/USD pair continued to fall on Friday after closing under the corrective level of 61.8% (1.3576) in the direction of the Fibo level of 50.0% (1.3497), which continues today. The rebound of quotes from the level of 1.3497 will work in favor of the EU currency and some growth in the direction of the corrective level of 61.8% (1.3576). Consolidation under this level will increase the probability of further fall in the direction of the next Fibo level of 38.2% (1.3418). In general, the pound has been falling for more than a week. Previously, it had been growing for a month, which sometimes caused some surprise, since there were not always reasons for this. But now we see just the opposite picture. On Friday, the report on retail trade in the UK showed a decrease in volumes by 3.7% y/y. And although the fall of the British dollar itself during the day was not so strong as to focus attention on it, in general, the currency continues to fall. On Monday, there were new reasons to get rid of the pound sterling, because business activity indices declined in January.

In the service sector - up to 53.3 points, and in the production sector - 56.9 points. And although, from my point of view, this fall is absolutely expected and not so strong, nevertheless, traders again got the opportunity to sell the pair, which they did from Monday morning. By the way, all the statistics that are scheduled for this week have already been released in Britain. Then everything will depend only on American reports and on the Fed meeting. Although it seems to me that now a lot does not depend on the information background, although, of course, no one can ignore the Fed meeting. As I said, the pound has been growing for a whole month and the graphic picture of the 4-hour chart perfectly reflects the change in mood to bearish. The general situation in the UK also gives no reason to expect a rise in the pound. The political situation remains tense, Boris Johnson is being called to resign, and an investigation into "wine Fridays" in Downing Street has begun. All this does not bode well for the British. Negotiations on the Northern Ireland Protocol between Brussels and London should resume soon.

Forecast for GBP/USD on January 24. The pound has exhausted all its luck

On the 4-hour chart, the pair performed a rebound from the corrective level of 38.2% (1.3642) and began a new process of falling in the direction of the corrective level of 50.0% (1.3457). A rebound from this level will allow the British dollar to grow slightly, but closing below it will allow us to count on a further fall in the direction of the next corrective level of 61.8% (1.3274). Emerging divergences are not observed in any indicator today.

News calendar for the USA and the UK:

UK - index of business activity in the manufacturing sector (09:30 UTC).

UK - index of business activity in the service sector (09:30 UTC).

US - index of business activity in the manufacturing sector (14:45 UTC).

US - PMI index for the service sector (14:45 UTC).

On Monday, the British reports have already been released, so it remains to wait for the American reports. I believe that they will not have a serious impact on the mood of traders, but the British currency continues to fall quite heavily without it. Thus, the information background may not have an impact, but the fall may continue.

GBP/USD forecast and recommendations to traders:

I recommended selling the pound if there is a rebound from the level of 1.3642 on the 4-hour chart with targets of 1.3497 and 1.3457. Now they can be kept open. I do not recommend buying a pound yet, as the pair may be at the very beginning of a new "down" trend.

Analyst InstaForex
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