Today, we will return to the second most important currency pair - the pound/dollar, where the main focus will be on the technical analysis of this instrument. However, before proceeding to the consideration of the GBP/USD price charts, I will note the most important macroeconomic indicators that can affect the price dynamics of this instrument. In the absence of British statistics, today all the attention of market participants will be focused on an extensive block of macroeconomic indicators from the United States of America, which will begin to arrive starting from 13:30 London time. I believe that the most important releases will be retail sales, industrial production, as well as initial applications for unemployment benefits and inventory in warehouses. Also, some members of the Fed's Open Market Committee are scheduled to speak a little later.
To complete the fundamental part of this article, I will briefly touch on yesterday's speech by the Chairman of the US Federal Reserve System (FRS), Jerome Powell, which is described in more detail in today's euro/dollar review. The main theses of the speech of the head of the Federal Reserve were comments on interest rates, or rather the timing of their increase. I note that this information is always very sensitive and is perceived by market participants with great attention. So, Powell said that this year we should not expect the Federal Reserve to take steps to tighten monetary policy. In other words, the chances that the Fed will raise rates in 2021 are negligible. But the next steps in monetary policy will depend on the macroeconomic indicators and the impact of COVID-19 on the world's leading economy. In general, Powell is pleased with the pace of the economic recovery and even called for a faster reduction in the volume of bond purchases.
Daily
Meanwhile, the pound bulls continue to struggle to overcome the important mark of 1.3800 and consolidate the quote above this significant level. To tell the truth, they are not very good at it yet. This can be judged by the long upper shadow of yesterday's daily candle, which appeared after reaching the highs on April 14 at 1.3807. Of course, the red line of the Ichimoku Tenkan indicator, which runs at 1.3792, that is, right below the mark of 1.3800, also contributes to the resistance. At the moment, the pound bulls are testing this line again and the level of 1.3800 for a breakout. We must once again note their perseverance and determination. However, if you look closely at the daily price chart, you can see that the pair is already waiting for new tests at 1.3830/35. It is here that the lower border of the cloud and the blue line of the Kijun Ichimoku indicator pass. In my personal opinion, to fully indicate the seriousness of their intentions, players need to enter the cloud and gain a foothold in it. Under this condition, it is possible to grow to another important level of 1.3900.
Trading recommendations for GBP/USD:
Given the current weak state of the US currency and yesterday's comments by Jerome Powell, in which he made it clear that a rate hike in the US is still very far away, the pound/dollar pair still has prerequisites for continuing the bullish scenario. However, given the strength and importance of the price zone of 1.3800-1.3835, a reversal in the south direction cannot be excluded from here. Thus, at the moment, both purchases and sales are relevant. I recommend considering short positions in case of bearish candle signals appearing under 1.3800 or in the area of 1.3800-1.3835 on this or smaller timeframes. I recommend trying to buy at lower prices, after short-term pullbacks to the price zone of 1.3780-1.3765 and the appearance of bullish candle signals there. Since the situation for the GBP/USD pair is far from certain at the moment (those who do not want to take risks), it is better to stay out of the market for now. As you know, this is also a position.