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The GBP/USD pair remained above the moving average line for most of Thursday, a movement of little significance. A correction, in theory, suggests that the market is merely taking profit from previously opened positions. Corrections are not trends because they lack the multitude of causes and justifications that define trends. Corrections can be prolonged. If the pound has experienced continuous declines for two months, a corrective phase could last two to three months. During this time, the pound may fluctuate freely in both directions, making macroeconomic reports unreliable for predicting the duration of this period. Traders should note that the global downtrend persists, and the pound remains under pressure, with no substantial factors supporting its growth.
The market could pause for a few weeks, as low volatility (50 points per day) and range-bound movement make trading challenging during such periods. This week, no significant economic news has emerged from the UK, and none is expected. Meanwhile, U.S. reports have been largely uneventful. On Wednesday, before any statistics were released, the pound began to rise, suggesting a market-driven correction rather than a fundamental shift. The main movement, therefore, appears incomplete, and renewed declines are likely.
If this assumption holds, the pair will inevitably drop again. On the weekly chart, the price hasn't yet reached the nearest local low. Even if a new global uptrend has developed over the past two years, a downward correction against this trend is overdue. Regardless of the scenario, further depreciation of the pound is expected, with 1.1855 remaining a logical and valid target.
The Bank of England's reluctance to cut interest rates has so far prevented mass selling of the pound. However, the Federal Reserve appears set to slow the pace of its monetary policy easing while evaluating the potential policies of Donald Trump's administration. While it is evident how Trump's actions might impact markets, certainty remains elusive. If the Fed slows the pace of rate cuts, the dollar could gain additional market support. We recommend waiting for the correction to end before considering new short positions on the pound.
Trading Recommendations
The GBP/USD pair maintains a downward trend. We still do not recommend long positions, as the market has already exhausted the drivers for the pound's growth.
*এখানে পোস্ট করা মার্কেট বিশ্লেষণ আপনার সচেতনতা বৃদ্ধির জন্য প্রদান করা হয়, ট্রেড করার নির্দেশনা প্রদানের জন্য প্রদান করা হয় না।
ইন্সটাফরেক্স বিশ্লেষণমূলক পর্যালোচনাগুলো আপনাকে মার্কেট প্রবণতা সম্পর্কে পুরোপুরি সচেতন করবে! ইন্সটাফরেক্সের একজন গ্রাহক হওয়ায়, দক্ষ ট্রেডিং এর জন্য আপনাকে অনেক সেবা বিনামূল্যে প্রদান করা হয়।
