Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

GBP/USD: Correction Extends

By InstaForex GroupForexOct 19, 2021 01:33PM ET
www.investing.com/analysis/gbpusd-correction-extends-200605553
GBP/USD: Correction Extends
By InstaForex Group   |  Oct 19, 2021 01:33PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

The pound sterling has remained bullish since the beginning of the month. At first, it looked like a simple rebound after a collapse. As it turns out, speculative excitement fueled the sterling.

The US macroeconomic data has boosted the British currency. Industrial production growth in the country slowed to 4.6% versus 5.7%. On top of that, the previous result was revised downwards from 5.9%.

Consequently, industrial output plunged more than expected. The reading was forecast to drop to 5.7% from 5.9%. We can still see industrial production growing on an annual basis.

Meanwhile, the indicator contracted by 1.3% monthly, missing market expectations of a 0.3% rise. That is why a protracted correction comes as no surprise.

US industrial production.
US industrial production.

The greenback could face pressure today amid a 1.6% drop in housing starts in the United States. In addition, building permits tumbled 7.7% MoM, meaning that housing starts could continue to decline.

Macroeconomic data in the US has recently been disappointing, leading to a weaker US dollar.

US housing starts data chart.
US housing starts data chart.

Technical View

The corrective move in GBP/USD slowed near the swing high as of Oct. 23. As a result, the volume of long positions decreased, and the price bounced to 1.3708.

If the pair fails to consolidate below 1.3700, we can assume that the volume of short positions is insufficient to reverse the trend.

The Relative Strength Index (RSI) moves within line 70 on the 4-hour chart, signaling long positions build up.

The price tested the 38.2% retracement level from bottom to top. The 50.0% level lies around 1.3830.

Despite the corrective move, the market remains bearish, confirmed by the downward trend that started in early June.

GBP/USD 4-hour chart technical analysis.
GBP/USD 4-hour chart technical analysis.

Outlook

We can assume that the next resistance level lies in the 1.3800/1.3830 range, where the volume of long positions is likely to decrease. Consequently, this may lead to the end of the corrective move.

In terms of complex indicator analysis, technical indicators are signaling to buy the pair for short-term and intraday trading as the price is within the swing high of the corrective move.

InstaForex Group

GBP/USD: Correction Extends
 

Related Articles

Blake Morrow
Chart Of The Day: EUR/GBP By Blake Morrow - Jan 24, 2022

EUR/GBP has been in a descending channel since spring 2021, and the pair just rallied past the .8380 breakdown point leaving the bears being the "bag holders" near term. The...

GBP/USD: Correction Extends

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email