Hot forecast and trading recommendations for GBP/USD on June 16, 2020

Unexpectedly, but it seems like the negotiation process on the commercial part of the divorce agreement between London and Brussels has moved forward. At least officials tirelessly claim to have taken a big step forward. The first to talk to about this was Boris Johnson, who was personally present at the talks. Although there is no specifics, the point is that the UK is ready to soften its position on a number of issues. But the most surprising is that the European Union is also ready to make some concessions. So the very prospect that the long-standing epic with Brexit is finally close to completion, and even successful, is an excellent reason to strengthen the pound. Although it should be noted that some progress in the negotiation process has been announced before, but everyone has been marking time to this day. This time, too, there is no specifics.

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Similarly, the labor market data raises quite a few questions, which was recently published. On the one hand, the unemployment rate remained unchanged, at around 3.9%. And this looks very strange, since the number of applications for unemployment benefits decreased from 856,500 to 528,900. At first glance, everything is logical - the number of applications has decreased and the unemployment rate has remained unchanged. However, it was predicted that the unemployment rate should grow to 4.4%, while the number of applications should have been reduced to 330,000. In other words, we see that the number of applications has not decreased as much as expected, and, in theory, the unemployment rate was to grow quite significantly. But everything happened completely differently. So once again, labor market data is more likely to raise uncomfortable questions than joy and optimism about the pound.

Unemployment Rate (UK):

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Nevertheless, in general, the prospects for the pound look pretty good today. It's all about US statistics. Indeed, the pace of decline in retail sales in the United States may accelerate from -21.6% to -24.6%. It is worth noting that the current pace of decline is already record high. And of course, we are talking about an indicator that best reflects the dynamics of consumer activity, which is the main driver of the US economy.

Retail Sales (United States):

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In terms of technical analysis, we see an intensive upward trend, where the quote once again consolidated above the level of 1.2620, which means the desire of buyers to keep the previously set movement in terms of changing market ticks. In all this fluctuation, speculative activity is clearly visible, which gives the market consistently high volatility. Regarding the distance traveled, it is worth starting from May 25, that is, the beginning of the upward inertial course, due to which the pound has gained more than 650 points in weight. After which there is a correction, on the basis of which a regrouping of trading forces takes place, playing back the earlier inertial move by almost half.

Considering the trading chart in general terms, the daily period, it is worth highlighting the gradual change in market ranges where the quote is already trying to return to the fluctuating area of the end of 2018.

It can be assumed that the previously set move will remain on the market, but before further movement towards 1.2770, price fluctuations in the region of 1.2620/1.2685 are not excluded, where it is possible to enter local positions.

From the point of view of a comprehensive indicator analysis, you can see that the indicators of technical instruments on hourly and daily periods still indicate upward interest, signaling purchases.

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The material has been provided by InstaForex Company - www.instaforex.com