GBPUSD long sideways correction

The situation still looks bearish and it is possible that ahead of us, GBPUSD long sideways correction is developing. How can the British pound surprise us?

7 September, AtoZForex – A number of statistical data that were published recently, shows the steady state of the British economy. Reducing the degree of tension around the consequences of the Brexit. This allows buyers to recover some lost ground. In addition, the British 10-year bond yields are increasing in relation to their counterparts from the United States and Germany. In return, this increases the attractiveness of investments in British assets.

Yesterday, GBPUSD continued to move in a confident uptrend, despite the absence of significant economic news from the UK. GBPUSD managed to break through yesterday’s high 1.3375 and has returned to the values of mid-July this year. Another reason for the rapid growth is the weakening of the USD, due to disappointing fundamental US data and the slowdown of new jobs. On top of this, the index of business activity in the US has dropped to the lowest level since January 2010.

GBPUSD long sideways correction

GBPUSD 4 hour chart GBPUSD H4 chart (Click to zoom in)

The important thing is that the whole picture still looks corrective. Hence, the price still has a chance to move down.

– GBPUSD is trading above the 50, 100 and 200 which points to the continued bullish sentiment.

– The MACD histogram is in the positive zone and below its signal line, continues to decline, and gives a sell signal.

– The RSI is directed downward and shows the same signal as the MACD.

– Stochastic Oscillator toward oversold and generates a sell signal as the% K line falls below the% D.

As the majority of our indicators show a downtrend, the general view for the GBPUSD remains bearish. Although, the pair has recently tested new highs. Today, the BoE governor Mr. Carney revealed that more stimulus would be considered if it is necessary. This has added additional pressure on the British pound.

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