The pound went through some volatility, but generally, it remained at the same level. This is despite the fact that the latest US report showed that applications for unemployment benefits fell by 9,000, while it was expected to rise by 7,000. In other words, the data turned out to be significantly better than the forecasts, but the dollar did not strengthen. This proves that the dollar is still overbought. And it also provides a hint on what we should expect in today's trading session. Since the dollar is still overbought and the economic calendar is completely empty, the market may be busy with correcting the current imbalances. In other words, the pound will likely rise, albeit not significantly.
During a pullback, GBP/USD returned to the sideways channel between 1.2600 and 1.2800, which it was previously in. Afterward, it moved near the lower boundary of the channel.
On the four-hour chart, the RSI hovered slightly below the 50 middle line. This technical signal indicates an increase in selling volumes.
On the same time frame, the Alligator's MAs are intersecting each other, which corresponds to the stagnant phase.
Outlook
From a technical perspective, the focus is on the level of 1.2600. Keeping the price above this mark at the end of the week may indicate that the pair could go back to trading within 1.2600/1.2800. Meanwhile, keeping the price below 1.2600 could lead to another attempt to update the local low set in December.
The complex indicator analysis points to a stagnant phase in the short-term and intraday periods.
