empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

10.09.202108:45 Forex Analysis & Reviews: Breaking forecast for GBP/USD, 10.09.2021

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Yesterday, the pound sterling managed to surprise traders with unexpected sharp growth. It happened even before the announcement of the results of the ECB meeting. The euro was trading flat all day. So, such a significant increase in the quotes did not occur thanks to the most anticipated event of the week. Interestingly, there were no other fundamental factors that may push the pound sterling higher. Thus, a sharp rise in the pound sterling was mainly due to speculative trading. As traders were awaiting the results of the ECB meeting, they were unwilling to open short or long positions. However, at some point, the situation has changed. Early in the morning, a large investor entered the market and opened long positions that were not related to the results of the meeting. The market was already strained ahead of the meeting and any activity in the market could not go unnoticed. After new positions were opened, market participants panicked and also began to actively buy the pound sterling. As a result, the British currency jumped even more. However, the rally was triggered by speculative trading. This is why traders might think that the pound sterling is overpriced and start opening short positions. If so, the British currency may soon return to its previous levels. Of course, this is just an assumption but there is simply no other reasonable explanation.

In addition, as expected, traders ignored the US jobless claims report. Its release coincided with the press conference of Christine Lagarde. Naturally, the main focus was on Lagarde's speech. However, the report turned out to be somewhat worse than forecasts, although the number of initial jobless claims keeps decreasing. The figure dropped by 35,000 versus the forecast value of 26,000. At the same time, the number of continuing claims declined by only 22,000 while economists had expected a drop of 62,000.

US Continuing Jobless Claims:

Exchange Rates 10.09.2021 analysis

Today, the UK unveiled industrial production data. The reading turned out to be slightly better than forecasts. Economists had expected a slowdown in growth to 3.2%, from 8.3%. However, the decline amounted to 3.8%. The pound sterling did not react to this report. It seems that positive data just supported the British currency. Besides, it may drastically fall at any moment.

UK Industrial Production:

Exchange Rates 10.09.2021 analysis

The pound sterling may also rise following the data on US producer prices. The reading is expected to rise to 8.3% from 7.8%. Given that the producer price index is a leading indicator for inflation, its growth will signal a further acceleration in inflation. Notably, inflation has already hit the highest level in the last few decades. Undoubtedly, its further increase may have a devastating impact on the economy.

US Producer Price Index:

Exchange Rates 10.09.2021 analysis

Yesterday, the GBP/USD pair soared amid speculative trading. It bounced from the support zone of 1.3730/1.3750 and rose to the level of 1.3880.

Due to a sharp price change in a short period of time, the British currency is overbought. This is confirmed by the technical indicator RSI movement above the 70 line.

Outlook:

The pair may be unable to beak through the resistance level of 1. 3880. If so, it will lead to a reduction in the volume of long positions. Thus, the price will resume a downward movement. Alternatively, if the price consolidates above 1.3905 on the 4H chart, the pound sterling is likely to rise higher.

The comprehensive indicator analysis indicates a long signal based on short-term and intraday charts amid the price rebound from the support area of 1.3730/1.3750. Bear in mind that the indicators are unstable. So, there is a high probability that the current trend may change.

Exchange Rates 10.09.2021 analysis

Dean Leo
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off