In today's article on the pound/dollar pair, we will once again briefly note the Federal Reserve System (FRS) positions and the Bank of England, after which we will proceed to consider the GBP/USD price charts. So, as has been repeatedly noted in previous materials, the Fed played a cruel joke with the US dollar, not giving a clear hint at the results of the last July meeting about its readiness to move to tighten monetary policy. This week, on August 5, a scheduled meeting of the Bank of England will be held, where an accompanying statement will be published, and the volume of the asset purchase program will be announced. I will immediately express my opinion: it is hardly necessary to wait for any drastic changes from the British Central Bank. Moreover, the delta variant or COVID-19 strain poses a threat to economic recovery in the UK and around the world. In this regard, the Bank of England is likely to be cautious and will not make any changes to the current monetary policy. Moreover, we are unlikely to hear even any hints about this. However, we will wait until Thursday.
Monthly
June began for the pair in a rather negative way. During the trading, the quote fell into a strong technical zone near 1.3570, where it was quite expected to receive strong support and actively began to restore all the losses incurred before. As a result, the pair soared to 1.3981. However, it could not stay near this mark and ended the July trading at 1.3898. As it has been repeatedly noted earlier, the key trading range that can determine the further direction of the exchange rate is 1.4000-1.4015. However, even the mark of 1.3900 still seems to be a fairly strong nut to pass up.
Nevertheless, it should be noted that the GBP/USD pair is trading near the upper border of the Ichimoku indicator cloud, and during the July trading, there were attempts to exit it up. Although these attempts were unsuccessful last month, the pound/dollar pair is bullish. Thus, it is quite possible that at the beginning of the month, the pair will continue its efforts to get out of the cloud, as well as a true breakdown of the key technical and psychological zone of 1.4000-1.4015. Summing up the results of the monthly chart review, I think it is necessary to pay attention to the significant support that the pair received in July from the red line of the Tenkan Ichimoku indicator, from which the recovery began. It is also worth highlighting the black 89 exponential moving average, which the bears failed to push through. I keep a bullish view on the pair and consider the most likely grow to be shown in the last month of summer.
Weekly
On this chart, attention has already been drawn more than once to the highlighted candle, which is very similar in shape to the "Hammer." The main point of this model is a very long lower shadow, which signals that the market does not intend to decline, and therefore will grow. How can you not demonstrate growth after the formation of such candles? Although the market is different, the price movement sometimes occurs despite even such pronounced signals. But not this time. Again, we have to pay attention to the Tenkan and Kijun lines of the Ichimoku indicator, which blocked the quote's path upwards last week. At the same time, each of them is quite strong in itself, but when they come together, then this is a real barrier. Most likely, the pair will continue to grow. The nearest target of which will be the most important area of 1.3980-1.4015, where the fate of the further price direction of the pound/dollar pair will be decided. According to the considered two most senior timeframes, I am forced to assume an ascending scenario with a high degree of probability. We will talk in more detail about trading options in tomorrow's review of GBP/USD.