I think it's no secret that in recent years the market has been dreaming of the beginning of a tightening of monetary policy and the first-rate hikes after COVID-19. Naturally, all the equalization in this matter will be on the US Federal Reserve System. I think that only after the Fed starts the cycle of raising rates (opens the season), the rest of the major and leading world central banks will pick up a new monetary trend. So, according to one large commercial bank, the British Central Bank may begin raising rates in the middle of 2023. At about the same time when the Federal Reserve will begin to tighten its monetary policy. In the meantime, as it became clear following the results of the last meeting of the Bank of England, the current policy remains appropriate, and there will be nothing to change the English regulator in the next two years. However, two years is a long time, and a lot can happen. At the same time, there are officials in the Bank of England who advocate the earlier start of tightening monetary policy. In my personal opinion, the fact remains unchanged that the alignment of the world's leading central banks will be on the Fed. After the most powerful and influential bank in the world begins to tighten monetary policy, the rest will also move to the process of raising rates.
If you look at today's economic calendar, the most significant indicator will be the index of confidence of American consumers, which will be published at 15:00 London time. And now, let's see what changes have occurred on the price charts of the pound/dollar currency pair.
Daily
Yesterday's trading on GBP/USD was quite ambiguous. After the pair rose to 1.3938, there was a change of sentiment, and the pair moved to a decline, closing Monday's session at 1.3876. I want to draw attention to the fact that the bulls on the pound cannot keep the initially acquired advantage, and this is not the first time this has happened. Now, the pound/dollar is testing a significant and strong support level of 1.3860 for a breakdown at the moment of writing. However, given Friday's data on the US labor market, everything can change dramatically. It depends on what will be the actual figures for American labor reports. Now about the prospects. As already noted the day before, in the event of a breakdown of 1.3860, the pair will fall into the price zone of 1.3820-1.3790, while a breakdown of the support level at 1.3785 will finally indicate bearish sentiment for the British pound. The bulls have the same task for the instrument — it is a breakdown of a strong and essential technical and psychological level of 1.4000. I would even designate the price zone of 1.4000-1.4030 since the 50 simple moving average, and the blue Kijun line of the Ichimoku indicator rises above 1.4000. Given the repeated and futile attempts to break through the 1.4000 level, the tasks of the bulls for the pound seem more difficult than those of their opponents. But again, I note that everything will fall into place after releasing Friday's labor statistics from the United States.
H4
In this timeframe, the situation is very similar to what develops on the four-hour chart for the euro/dollar. The GBP/USD pair is trading under the used moving averages of 50 MA, 89 EMA, and 200 EMA, the latter of which is located slightly above the ill-fated for players to increase the level of 1.4000. Given the technical picture, I continue to incline the fact that sales are more relevant. I suggest waiting for the rate to rise to the area of 1.3975-1.4010, and if there are bearish reversal candles on this or hourly charts, sell with the nearest targets near 1.3860. If the support at 1.3860 does not stand and the quote falls to the price area of 1.3820-1.3790, and bullish candlestick patterns appear, we buy with targets in the area of 1.3900-1.3930.