Yesterday, the British pound repeated the twist made by the euro the day before. In the middle of the session, the pound developed an active uptrend but then returned to the opening levels just at the start of the American session. So, the picture remained unchanged by the end of the day.
The only difference here is that the euro advanced on Monday amid reports from the US media saying that the European Central Bank would raise its interest rate. Allegedly, several major market participants demand that the regulator raise the rate four times by the end of this year. This turned out to be mere speculation which was quickly forgotten.
The single European currency returned to the levels where it started the trade on Monday. As for the pound, nothing like this happened. The news background was weak. There was a release of the lending data in the UK followed by new job openings in the US later in the day. Yet, the rise and then the fall of the pound happened between these two events, while at the moment of publication, the market stayed still.
All this suggests that the pound/dollar movements were purely speculative. Such market sentiment can be caused by the fact that Russia demands the European countries to pay for gas in rubles. However, several EU officials have repeatedly said it was impossible. In response, Moscow said it would stop its gas supply to Europe. The turning point will be on Apr. 1. So, this extreme uncertainty in the market is a favorable ground for speculative activities.
Despite high speculative activity on the pair, GBP/USD closed the day at the opening levels, thus forming the Doji candlestick pattern. This pattern indicates the balance between bulls and bears and the high state of uncertainty among traders.
The RSI is moving in the lower area at 30/50 on the H4 chart, signaling a strong selling interest. The Alligator Indicator on H4 and D1 confirms the downtrend since its moving averages do not intersect. On the daily chart, the US dollar is regaining ground after a recent correction. The psychological level of 1.3000 serves as the main pivot point.
Outlook
The current uncertainty could be caused by the fact that the price has approached the important level of 1.3000, where traders reduced the number of short positions. It is still possible that the quote will rebound from the pivot point.
Therefore, the continuation of the downtrend will be confirmed only after the price consolidates below 1.3000 on the 4-hour chart. Until then, a sideways movement or a local pullback is possible. Comprehensive indicator analysis gives a mixed signal on the short-term and daily time frames due to the Doji pattern. In the medium term, indicators signal sales as the downtrend is still in place.