17.05.202309:16 Forex Analysis & Reviews: Hot forecast for GBP/USD on 17/05/2023

Once again, it was not possible to perform a full-fledged rebound, and this was hindered exclusively by macro data. It all started with the labor market in the United Kingdom, where the unemployment rate suddenly rose from 3.8% to 3.9%, although it was supposed to remain unchanged. Then, the retail sales data in the United States spoiled everything, the growth rate of which slowed down, but only to 1.6%, instead of the expected 1.4%. And industrial production seemed to be somewhat better than forecasts, as its growth rate accelerated from 0.1% to 0.2%. Although a slowdown from 0.5% to 0.3% was expected. The previous data was significantly revised downwards. However, we should not forget that industry accounts for slightly less than a fifth of the American economy, while the service sector accounts for four-fifths. And retail sales are the main indicator of the state of the service sector, and with it the entire economy as a whole.

Retail Sales (United States):

However, it is worth paying attention to the fact that despite all the latest reports the pound essentially remained in the same place. It turns out that there is simply nowhere for the dollar to grow, and the market needs only a slight pretext for a correction and at least some growth of the pound. Considering that today's macroeconomic calendar is essentially empty, there is a probability of a symbolic rise of the British currency. Although the most likely scenario is the persistence of stagnation.

Despite high volatility, the GBP/USD pair failed to overcome the control value of 1.2550. As a result, there was a pullback, which brought the quote back below the 1.2500 level.

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 correctional movement.

Outlook

Keeping the price below the 1.2500 level increases the chances of further downward movement. In this scenario, it is possible to update the local low of the corrective move. As for the bullish scenario, it is not enough to just return above the 1.2500 level, the quote needs to stay above the 1.2550 value for at least a four-hour period.

The comprehensive indicator analysis in the short-term and intraday periods points to a corrective cycle. In the medium-term period, the indicators are reflecting an upward cycle.