19.05.202309:15 Forex Analysis & Reviews: Hot forecast for GBP/USD on 19/05/2023

The overbought condition of the dollar can cause as much anxiety, but the latest macro data supports its further growth. This time, the pound depreciated due to data on claims for unemployment benefits, which turned out much better than forecasts. The number of initial applications, which was supposed to increase by 6,000, fell by 22,000. Not only did the number of repeated applications fall by 8,000 but the previous data was also revised downwards, from 1,813,000 to 1,807,000. And it was expected to increase by 6,000. Thanks to all of this, the dollar was able to extend its rally.

Today, the macroeconomic calendar is completely empty, although a number of speeches by representatives of the Federal Reserve and the European Central Bank are planned. However, they will take place quite late, and even if there are some resounding statements, the market will likely play them back next week. And considering the overbought condition of the dollar, the likelihood of at least a slight rebound becomes even more impressive.

The GBP/USD pair continued its downtrend, extending the corrective cycle. The pound fell by approximately 45 pips for over a week now.

On the four-hour chart, the RSI is moving in the lower area of the indicator, thus reflecting bearish sentiment among traders.

On the same timeframe, the Alligator's MAs are headed downwards, which reflects the corrective move.

Outlook

If the bearish sentiment persists in the market, there's a high likelihood of a move towards the support level of 1.2350. The volume of short positions could fall around this value, which could slow down the corrective move.

The comprehensive indicator analysis in the short-term and intraday periods points to the corrective cycle. In the medium term, some indicators have an unstable signal due to the scale of the correction. However, at this stage, the corrective move still fits into the component of the medium-term uptrend.