In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the GBPUSD for 16th February 2024.
Key Takeaways
- US may require more stimulus: In January, US Retail Sales slumped –0.8%, significantly lower than forecasted reading of –0.1%, marking its largest decline since March 2023. Following the release, swap market priced in for more rounds of policy easing in 2024.
- Recessive economy in UK: Referring to previous data from the UK, its economy is deduced to have entered a technical recession since the second half of 2023. For January, the UK Core Inflation Rate continues to hover at the high level of 5%. This implies that the current policy setting needs to be maintained longer. However, it is worth noting that retail sales and employment-related data shows downward momentum, which may spell difficulty for the Bank of England in setting its next policy move.
Technical Analysis
Daily Chart Insights
- Stochastic Oscillator: The indicator begins to form bearish signal near the oversold threshold, suggesting heightened downside bias for the time being.
- Strong resistance: The pair was blocked by downward trendline, which is reinforced with 33-week MA. Thus, we will need to wait for further signal to confirm its next move and market entry opportunity.
4-hour Chart Analysis
- Downward channel line: The pair entered downside bias since last year, forming a downward channel line in the process. Early this month, the pair received some support from the downside and rebounded from the lower threshold of the channel. We will monitor for a possible rebound in the meantime.
- Elliot Wave Theory: Based on wave structure, the pair is currently in wave (C), staging for a rebound. We will need to pay attention to 61.8% of Fibonacci retracement above. This area, which also intersects with a 240-period moving average will provide further confirmation for upside bias if a breakout occurs.
Pivot Indicator
- According to the trading central in Ultima Markets APP, the central price of the day is established at 1.2570,
- Bullish Scenario: Bullish sentiment prevails above 1.2570, first target 1.2605, second target 1.2620;
- Bearish Outlook: In a bearish scenario below 1.2570, first target 1.2555, second target 1.2540.
Conclusion
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Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.
