The initial comments made during the Jackson Hole symposium largely matched the expectations and assumptions of market participants. The Federal Reserve will continue to raise interest rates. The only question is how many more rate hikes can we expect. But in any case, this is enough for the dollar to appreciate in value. Yet, a significant part of its growth happened even before any references to the Fed remarks appeared in the media. But as mentioned earlier, the market was expecting something like this. And now everyone is waiting for Fed Chairman Jerome Powell’s speech and subsequent comments. However, given the ability of the former lawyer, which is how Powell’s career started, who can speak a lot about everything and nothing without saying anything substantial, we shouldn’t expect Powell to provide an answer to the most critical question. This, in turn, may weaken the dollar demand and return its values to where it was a couple of days ago.
The GBP/USD has completed the construction of a three-week sideways channel at 1.2650/1.2800 by breaking its lower band. As a result, the volume of short positions had increased, which fueled the downward cycle.
On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, thus reflecting bearish sentiment among traders.
On the same time frame, the Alligator’s MAs are headed downwards, which corresponds to the direction of the movement.
Outlook
Given that the pound has significantly fallen over the past day, we can assume that short positions are close to overheating, allowing for a technical pullback. The 1.2550 support level, which the price recently approached, can serve as a support. However, if the price follows the momentum, traders may ignore signals on overselling. In this case, keeping the price below the 1.2550 level may extend the downward movement.
The complex indicator analysis points to a downward cycle in the short-term, intraday, and medium-term periods.
The material has been provided by InstaForex Company – www.instaforex.com
The initial comments made during the Jackson Hole symposium largely matched the expectations and assumptions of market participants. The Federal Reserve will continue to raise interest rates. The only question is how many more rate hikes can we expect. But in any case, this is enough for the dollar to appreciate in value. Yet, a significant part of its growth happened even before any references to the Fed remarks appeared in the media. But as mentioned earlier, the market was expecting something like this. And now everyone is waiting for Fed Chairman Jerome Powell’s speech and subsequent comments. However, given the ability of the former lawyer, which is how Powell’s career started, who can speak a lot about everything and nothing without saying anything substantial, we shouldn’t expect Powell to provide an answer to the most critical question. This, in turn, may weaken the dollar demand and return its values to where it was a couple of days ago.
The GBP/USD has completed the construction of a three-week sideways channel at 1.2650/1.2800 by breaking its lower band. As a result, the volume of short positions had increased, which fueled the downward cycle.
On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, thus reflecting bearish sentiment among traders.
On the same time frame, the Alligator’s MAs are headed downwards, which corresponds to the direction of the movement.
Outlook
Given that the pound has significantly fallen over the past day, we can assume that short positions are close to overheating, allowing for a technical pullback. The 1.2550 support level, which the price recently approached, can serve as a support. However, if the price follows the momentum, traders may ignore signals on overselling. In this case, keeping the price below the 1.2550 level may extend the downward movement.
The complex indicator analysis points to a downward cycle in the short-term, intraday, and medium-term periods.
The material has been provided by InstaForex Company – www.instaforex.com
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