The British pound did not reach the high growth expectations placed on it. At the moment, the weekly candle has a long upper shadow and a not-so-small bearish body. However, today, after the release of data on the US labor market, a lot may change in the technical picture of the GBP/USD pair. A large block of labor statistics from the United States of America will be released at 13:30 London time.
What can be said about the pound? In addition to the already stale divorce process between the UK and the EU, which should be completed by December 31 this year, as well as the negative impact of the COVID-19 pandemic on all the world's leading economies, including the British one, the pound exchange rate will significantly depend on the monetary policy of the Bank of England.
Never before in the history of the world's oldest bank has the possibility of introducing negative interest rates been considered. The pound and negative rates are incompatible. The British currency has always been associated with investors as a high-yield risky asset. The policy of the new head of the Bank of England, Andrew Bailey, has become much softer. Coronavirus is a coronavirus, however, lowering the stakes to negative territory is something out of the ordinary. However, it is not yet fully clear what the Brexit deal will be and what impact it will have on the British economy. Anyway, this is a matter of the next few months, and we are moving on to the analysis of the technical picture for the pound/dollar currency pair.
Daily
At yesterday's trading, the pair fell to the broken resistance level of 1.3265. Around the closing price of the day relative to this mark, there was a fierce struggle between the opposing sides, however, the bulls on the pound still managed to end Thursday's trading higher, at 1.3276. Now, at the moment of completion of this review, the pound/dollar pair is under a little pressure and is trading just near 1.3265. If the decline continues and the quote updates yesterday's lows at 1.3241, the next target will be 1.3229, where the Kijun line of the Ichimoku indicator runs. On any other day, this line could be counted on as strong support.
The bullish scenario will continue in the event of a census of yesterday's highs at 1.3355. I would like to note that this is a fairly strong technical level, which has repeatedly restrained and expanded the price.
If you go to today's trading recommendations for the GBP/USD pair, then those who do not want to take risks, it is better to stay out of the market. As you know, this is also a position. If the current weekly candle turns out to be a reversal, we will sell the pound next week. For other traders, the alternative option for trading GBP/USD is downward, which implies selling the British currency after short-term rises in the price zone of 1.3277-1.3303.