The pound showed a rather noticeable decline yesterday despite it being a holiday in the UK. Moreover, it began even before the US trading session opened. And at first glance, this is quite strange, since the single European currency actually stood still. And there was no news about the UK itself. At least those that could somehow affect the mood of market participants. However, it is worth paying attention to the fact that on Thursday, when, following a meeting of the Board of the European Central Bank, the euro was actively declining, the pound maintained relative stability. In fact, we are talking about the belated reaction of the British currency. After all, the euro, due to its scale, inevitably pulls other currencies along with it.
But investors have another reason for mass short positions on the British currency. Unfortunately, it lies in a slightly different plane than monetary policy or macroeconomic statistics. A couple of days ago, the media began to actively talk about the upcoming large-scale offensive of the armed forces of the Russian Federation in the Donbas. And it started late last night. At least that's what the Western media say about it. In fact, we are talking about a new round of escalation of the conflict. That is, the risks on the European continent have increased dramatically. It is quite obvious that this will contribute to the flight from risk, so the pound will inevitably continue to lose its positions.
The GBPUSD currency pair completed the correction course with a full recovery of dollar positions. This led to the price returning to the 1.3000 level limit, while there is confirmation of its breakdown in the four-hour period.
The technical instrument RSI H4 and D1 is moving in the lower area of the 30/50 indicator. This move indicates the prevailing interest of traders in short positions.
The Alligator H4 indicator has completed the crossover between the MA moving lines in a downward cycle. Alligator D1 is still giving a sell signal, MA lines are pointing down.
Expectations and prospects:
In this situation, the main signal to sell the pound will come from the market as soon as the price stays below 1.2950. In this case, bears will have every chance to prolong the medium-term downward trend. Otherwise, the market may stagnate within the deviations of the psychological level.
Comprehensive indicator analysis gives a sell signal in the short, intraday and medium term due to the downward cycle.
