The first estimate of the UK’s GDP for the first quarter was supposed to show the danger of an approaching recession, as the economic growth rate could slow from 0.6% to 0.3%. But in fact, they dropped to 0.2%. So, the recession is getting closer. And naturally, this had a negative impact on the pound. Another thing is that a noticeable reaction started only at the opening of the American trading session. And the fall of the pound, and along with it the single European currency, largely coincided with rumors about a new package of sanctions against the Russian Federation.
Change in GDP (United Kingdom):
The discussion is about the possibility of introducing a complete ban on pipeline gas supplies. That is, a ban on gas supplies to Europe. It seems like the West has already abandoned energy supplies from Russia, but in fact, supplies continue. And they are carried out precisely through pipelines. If such a ban is introduced, Europe will face an even greater energy deficit. It may well cope with this problem, as happened last year, but the cost of energy will become even higher, which will have an even more serious impact on European industry. That is, Europe will be the main victim. This is exactly what caused the fall of European currencies. Today’s data on industrial production in the eurozone, the growth rate of which is expected to slow from 2.0% to 1.1%, could confirm these fears. So, following the single European currency, the pound may fall even further.
The GBP/USD pair has lost about 200 points in value over the past week. This momentum has led to a full-scale correction, which is shown by the medium-term uptrend.
On the four-hour chart, the RSI indicator has fallen into the oversold zone during a sharp price change, which indicates an abundance of short positions in the English currency.
On the same time frame, the Alligator’s MAs are headed downwards, which corresponds to the direction of the correctional movement.
Outlook
In this situation, a technical signal shows that the pair is oversold in the intraday period. This may indicate a slowdown and as a result, the end of the correction. However, we are dealing with a momentum and trend, in which speculators may simply ignore that technical signal. In this case, keeping the price below the value of 1.2440 may push the pair to fall towards the 1.2350 level.
The complex indicator analysis points to a downward cycle in the short-term and intraday periods. In the medium-term, the indicator is still providing a bullish signal.
The material has been provided by InstaForex Company – www.instaforex.com
The first estimate of the UK’s GDP for the first quarter was supposed to show the danger of an approaching recession, as the economic growth rate could slow from 0.6% to 0.3%. But in fact, they dropped to 0.2%. So, the recession is getting closer. And naturally, this had a negative impact on the pound. Another thing is that a noticeable reaction started only at the opening of the American trading session. And the fall of the pound, and along with it the single European currency, largely coincided with rumors about a new package of sanctions against the Russian Federation.
Change in GDP (United Kingdom):
The discussion is about the possibility of introducing a complete ban on pipeline gas supplies. That is, a ban on gas supplies to Europe. It seems like the West has already abandoned energy supplies from Russia, but in fact, supplies continue. And they are carried out precisely through pipelines. If such a ban is introduced, Europe will face an even greater energy deficit. It may well cope with this problem, as happened last year, but the cost of energy will become even higher, which will have an even more serious impact on European industry. That is, Europe will be the main victim. This is exactly what caused the fall of European currencies. Today’s data on industrial production in the eurozone, the growth rate of which is expected to slow from 2.0% to 1.1%, could confirm these fears. So, following the single European currency, the pound may fall even further.
The GBP/USD pair has lost about 200 points in value over the past week. This momentum has led to a full-scale correction, which is shown by the medium-term uptrend.
On the four-hour chart, the RSI indicator has fallen into the oversold zone during a sharp price change, which indicates an abundance of short positions in the English currency.
On the same time frame, the Alligator’s MAs are headed downwards, which corresponds to the direction of the correctional movement.
Outlook
In this situation, a technical signal shows that the pair is oversold in the intraday period. This may indicate a slowdown and as a result, the end of the correction. However, we are dealing with a momentum and trend, in which speculators may simply ignore that technical signal. In this case, keeping the price below the value of 1.2440 may push the pair to fall towards the 1.2350 level.
The complex indicator analysis points to a downward cycle in the short-term and intraday periods. In the medium-term, the indicator is still providing a bullish signal.
The material has been provided by InstaForex Company – www.instaforex.com
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