Until the opening of the US session, the pound held its ground and even tried to show some growth. However, it began to lose ground. Moreover, there were no news events that could move the market. So, it appears that we are dealing with a stable uptrend for the US dollar. Investors seem to be convinced that the Federal Reserve will pursue a more active policy than the European Central Bank. This is despite the fact that several Fed officials have been saying that there is no reason to raise interest rates at the upcoming meeting. But at the same time, other Fed officials are also saying that there was no need for immediate action, as inflation has already delivered an unpleasant surprise.
Today, the dollar may trade higher, partly due to the data on US jobless claims. If the number of initial claims increase by 11,000, the number of continuing claims should decrease by 33,000. And not only is the change in the number of continuing claims three times greater than that of initial claims, but they also have much greater significance.
The GBP/USD pair updated the low of the downward cycle. As a result, the price reached the level of 1.2500, indicating the prevailing interest in dollar positions.
On the four-hour chart, the RSI technical indicator shows that there is movement in the oversold area. This signal indicates that the pair looks deeply oversold in intraday and short-term periods.
On the same chart, the Alligator's MAs are headed downwards, which corresponds to the price's direction.
Outlook
A technical signal of the pound's oversold conditions, combined with the 1.2500 level, may indicate a decline in the volume of short positions. And as a result, a retracement is possible, and the pound may partially recover its value relative to the recent decline.
The bearish scenario may also come into play in which speculators will ignore the oversold signals. In this case, the price may fall towards the support level of 1.2350.
The complex indicator analysis points to a downward cycle in the short-term, medium-term and intraday periods.
