downward move

The market hardly reacts to final data on PMIs as they mostly coincide with preliminary estimates. Any significant trading movements usually occur during the release of the preliminary estimates. By the time the final data is published, the market has already taken these indicators into account. Furthermore, the preliminary estimates are released simultaneously for all indexes, while the final data is released at different times.   For example, today, only the manufacturing PMIs are slated for release, which have the lowest value among all business activity indexes. In other words, even if today's data differs from the preliminary estimates, which is possible, the market response will be relatively moderate, and so we shouldn't expect any significant movements. The preliminary estimate of the UK manufacturing PMI already revealed a decline from 47.1 points to 46.2 points.   The US PMI also fell from 48.4 points to 46.3 points. Therefore, the preliminary estimate already indicated a noticeable decline in the state of the industry. The GBP/USD pair has slowed down its downward cycle around the 1.2600 level, where a reversal occurred amid the weakening of the dollar positions.       As a result, the price returned above the 1.2700 level. On the four-hour chart, the RSI indicated the possibility of a price reversal when reaching oversold territory. On the same time frame, the Alligator's MAs reversed, indicating a slowdown in the downward cycle. Outlook In order to raise the volume of long positions, the quote needs to stay above the 1.2750 level. In this case, there may be a subsequent stage of recovery in the value of the British pound relative to the recent corrective move.   As for a subsequent downward move, falling below the 1.0650 level could easily reignite short positions. This will result in updating the local low of the corrective cycle. The complex indicator analysis unveiled that in the short-term period, technical indicators are pointing to a bearish bias from the 1.2700 level. In the intraday period, there is a primary signal of the end of the corrective phase. In the mid-term, the indicators are pointing to an uptrend.  

GBP/USD exhibited quite chaotic movements during the last trading day of the previous week, month, and year. The price constantly changed direction, but at the end of the day, it stayed above the trendline that has suggested an uptrend for the past couple of months. Therefore, the pair could resume its upward movement as early as Tuesday.   However, at the same time, the euro has settled below the trendline, indicating a good chance for a downward move. Take note that the euro and the pound often (almost always) trade in the same direction. Therefore, it wouldn't be surprising if the pound also settles below the trendline today. This would open up possibilities for the pound to fall towards the Senkou Span B line. Of course, any downward movement can easily come to an end near this line since the dollar is still weak, and market participants are not eager to buy it. However, this week will bring plenty of important information from the U.S., and if it turns out to be positive, the dollar could significantly strengthen its positions, especially amid a three-month decline and oversold conditions. Therefore, we believe that the pair could potentially start a downward movement as early as tomorrow, which we could work with. The main condition is for the pair to breach the trendline. Speaking of trading signals, there were quite a few on Friday, but volatility was weak, and the movements were chaotic. On the last day of the year, hardly anyone wanted to enter the market, especially since last week's movements were absolutely unpredictable. Therefore, we believe that the year has ended and it's best to leave it in the past.