By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Last week, the Pound was trading downwards against the USD, but the beginning of this one has been marked by calm movements close to 1.30.
The Brexit news keeps coming, but it is not as tensed as earlier. Last week, it became known that the British Prime Minister Theresa May was still under significant pressure due to upcoming to the European parliament and possible complications with another alternative exiting scenario. The British policymakers believe that May should act faster, but it is barley possible.
A lot of numbers published by the United Kingdom last week were rather neutral. For example, the Unemployment Rate, which has been quite low for 44 years in a row – an excellent result. At the same time, the Average Earnings Index added 3.5% 3m/y, the same as expected, which is also a very good signal.
The CPI was 1.9% y/y in March against the expected reading of 2.0% y/y. Both investors and economists believed the indicator would improve much faster, thus supporting the Pound. However, the inflation situation is currently looking pretty calm and stable.
In the H4 chart, GBPUSD is trading downwards. The market has broken the support level at 1.3045 and right now is still moving inside the downtrend. The current descending wave has the potential to reach 1.2900 – this scenario is confirmed by Stochastic Oscillator, which is expected to reverse early in May.
As we can see in the H1 chart, the descending wave continues towards the support level at 1.2963. After reaching it, the price may start a new correction towards 1.3045. MACD’s breaking the zero level may serve as an additional indicator of the decline and force the market to continue the trend down to 1.2900.
Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.