empty
 
 
23.09.2022 08:15 AM
Breaking forecast for GBP/USD on September 23, 2022

The US dollar is so overbought that everyone is expecting a technical rebound. The BoE's decision to raise the benchmark rate by 50 basis points became a reason for the expected rebound. However, it could have occurred even without any reason. Curiously, just after the rebound, the pound sterling began losing value and returned to the levels recorded before the announcement of the BoE's decision. The fact is that yesterday, headlines were caught by news about industrial companies, especially German ones, that are planning to move their production from Western Europe. Extremely high energy prices are the key reasons for the relocation. Notably, most companies are considering the United States as a new place for their business. Although it is just a castle in the air, the idea itself is preventing the euro from a rise. The fact is that Europe is tipping into recession and is suffering from surging inflation. Against the backdrop, the closure of enterprises will only worsen the growing economic crisis. All these factors are contributing to the capital outflow from Europe to the US. The process is so large-scale that it is affecting the pound sterling, which continues losing value.

UK Key Interest Rate

This image is no longer relevant

After a short-lived rebound, spurred by considerably overheated short positions, the pound sterling resumed falling. This proves bearish sentiment among traders.

On the daily chart and four-hour charts, the RSI technical indicator is hovering near the lower area of 30/50, which points to the fact that bears are controlling the market.

On the same time frames, the Alligator's moving averages are reflecting the global downtrend. There are no intersections.

On a daily period, we see the prolongation of the downtrend.

This image is no longer relevant

Outlook

Under the current conditions, the price settlement below 1.1200 will lead to another drop caused by an inertial movement and high speculative activity. If the predictions come true, the pound sterling may enter the oversold area. In this case, the currency may show a technical rebound.

According to the alternative scenario, the level of 1.1200 will act as support. If the decline slackens, the price will have a chance to rebound.

According to the complex indicator analysis, indicators are pointing to a downtrend in short-term, intraday, and mid-term periods.

Dean Leo,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback