Unlike the single European currency, the British pound showed a strengthening against the US dollar in yesterday's trading. However, given the Fed's decision on rates tomorrow, updated economic forecasts, and the press conference of the head of the Federal Reserve, Jerome Powell, it is not possible to draw unambiguous conclusions about the stable strengthening of the GBP/USD. In general, the "British" is such an unpredictable currency. Before proceeding to the price charts, let's briefly discuss today's macroeconomic reports, of which very few are expected. So, at 11:00 London time, data on the retail sales index according to the Confederation of British Industrialists will be received from the UK. At 15:00 (London time), the consumer confidence index will be published from the US, which today can be considered the most important fundamental release.
Daily
Despite yesterday's growth of GBP/USD, there are still questions about the further direction of this currency pair:
The quote is in the zone of uncertainty, which is considered the cloud of the Ichimoku indicator.The bidding takes place approximately in the middle of the cloud, which does not give any of the opposing parties an advantage.Yesterday's candle formed a fairly decent upper shadow, and the closing price on April 26 was below the important technical level of 1.3900.It is unnecessary to talk about an even more significant psychological and technical level of 1.4000 since the pair can not even come close to it. Not yet.
However, I fully admit that with the Fed's rhetoric unfavorable for the US currency, the pound/dollar pair can rocket up, breaking through everything in its path. But here, everything will depend on the reaction of market participants to tomorrow's events. On the other hand, if the new FOMC economic forecasts and the tone of Powell appeal to investors, the pair may just as well fall like a stone. Both scenarios are well suited to the volatile and speculative nature of the British pound. I repeat, much (if not all) will depend on the reaction of market participants to tomorrow's speech by the head of the Federal Reserve. At the moment, the GBP/USD pair is trading in a relatively narrow range of 1.3950-1.3850, the exit from which can determine the subsequent direction of this instrument.
H4
Looking at the four-hour chart of GBP/USD, it is worth paying attention to the strong support held in the area of 1.1855-1.1835. As you can see, here is the black 89 exponential moving average, the 50th Fibo level from the growth of 1.3667-1.4007, as well as the orange 200 exponent. I believe that the allocated zone is technically quite reasonable for opening long positions on the pound. As for possible sales, I recommend looking at them in case of bearish candle patterns on this or hourly charts in the price range of 1.3900-1.3920.