Richmond Federal Reserve President Thomas Barkin made a statement that further strengthened the dollar. In his opinion, before talking about rate cuts, it is necessary not only to reduce inflation to target levels, which is 2.0%, but also to confirm that it stabilizes at the desired value. Such words instantly increased the chance of further growth in the Federal Reserve's refinancing rate. Moreover, today the dollar can further strengthen its positions. This time, however, it is due to macro data. In particular, thanks to the expected increase in the unemployment rate in the United Kingdom from 3.7% to 3.8%.
Unemployment Rate (United Kingdom):
The British pound approached last week's low against the US dollar during the price retracement, which is around the 1.2350 level. In this case, this value acts as a variable support level where we can see a decline in the volume of short positions.
On the four-hour chart, the RSI technical indicator is hovering in the lower area of 30/50, which corresponds to the pullback. On the daily chart, the RSI is hovering in the upper area of 50/70, indicating an uptrend in the mid-term.
On the four-hour chart, the Alligator's MAs are headed downwards, which corresponds to the current pullback. In the mid-term, the Alligator's MAs are headed upwards which reflects the quote's movement.
Outlook
In order to transform the pullback to a full-scale correction, the pair needs to stay below the 1.2350 level. Otherwise, this coordinate will become support from which a gradual increase in long positions will emerge. In this case, the quote will return to the local high of the medium-term trend.
In terms of the complex indicator analysis, we see that in the short-term and intraday periods, technical indicators are pointing to a pullback. Meanwhile, in the mid-term period, the indicators are reflecting an upward cycle.
