Despite the lack of any strong reasons, the pound was steadily declining for most of the trading session. Notably, the economic calendar was empty at that time, and central bank officials did not make any statements either. The only bearish factor was the increased risk of monetary policy tightening by the Federal Reserve.
It seems that the reason for the falling pound was very speculative. This is precisely what happened, given that the sterling began to recoup its losses closer to the opening of the New York trading session. So, GBP almost managed to recover entirely by the end of the day.
Today, however, the situation should be different as markets are waiting for the data on new job openings in the US. This can be a good reason for speculation as well as for the significant depreciation of the US dollar.
The thing is, the official forecast of 10,400 job openings has not been revised. In the previous month, their number was 10,438. At the same time, the report from the US Department of Labor indicates that the number of vacancies is likely to be far less than expected.
Therefore, this will be perceived as a negative factor for the labor market. This should be enough to weaken the US currency. On the other hand, the fact that the number of new job openings has decreased goes well in line with a sharp fall in the unemployment rate.
On the contrary, this could signal a considerable improvement in the labor market. So, after a sharp movement in the pair caused by a purely emotional response, the situation may be back to normal, that is, to initial levels.
The GBP/USD pair slowed down the pace of decline near the local low of November 30 at 1.3194. This is where the pair was trading flat in the range of 1.3208/1.3288.
The RSI technical indicator is moving near the area of 30/50 on the H4 time frame, which signals that short positions currently prevail in the market.
On the daily chart, the quote is holding near the yearly low. This is a confirming signal for a downtrend. So, bears may win back their positions against the previous uptrend.
Outlook
The sideways channel between 1.3208 and 1.3288 is likely to end soon. The process of accumulating trading volumes seen during the flat movement may result in accelerated dynamics in the market.
In this case, the best trading strategy is to wait for a breakout of either of the channel boundaries. Buying the pair will be relevant if the price settles firmly above the level of 1.3290 on the 4-hour chart.
Selling the pair should be considered if the price holds below 1.3190 on the H4 chart. Comprehensive indicator analysis generates a mixed signal on the short-term and intraday charts due to the sideways movement of the price.