Hello, dear traders!
The GBP/USD fell by 0.44% within the previous week. The key drivers of the price were the FOMC and BoE meetings. The outcome of the FOMC meeting was discussed in the article on GBP/USD technical analysis. Meanwhile, the BoE surprised market participants with its hawkish comments. Notably, two MPC members spoke in favor of an earlier reduction in asset purchases. The market now expects the regulator to increase interest rates in March 2022. Investors did not anticipate such an outcome, which led to a rise in the pound sterling.
Weekly chart
Despite a rather long lower shadow of the previous candlestick, GBP/USD settled around the Ichimoku indicator, as well as below MA (50). At the same time, trade closed above the important technical level of 1.3600 and key support of 1.3570. The pair is expected to either rise or fall. In case of a true breakout of the blue Kijun Sen, the market will become bullish. The Kijun Sen is now limiting the pair's upside potential. For a bearish market, the quote should break the support level of 1.3570 and consolidate below it. The red Tenkan Sen and the blue Kijun Sen are also above the upper border of the cloud and the 50 MA, making it more difficult for bulls to establish control over the market. A trend will be determined if only the price leaves the 1.3570-1.3980 range of the weekly chart.
Daily chart
The orange EMA (200) located at 1.3721 is limiting the quote's upside potential on the daily chart. Until the price breaks the EMA, it seems unlikely that the pair will rise. Even in case of a breakout, bulls may struggle to push the quote further up because the blue Kijun Sen and the red Tenkan Sen are located around 1.3759. Moreover, the lower border of the daily Cloud and the MA (50) are also located in that range.
Generally speaking, bulls need to do a lot if they want to regain control over the market. At the same time, bears should push the quote below 1.3600, break the strong support level of 1.3570, and drive the price deep into the Ichimoku Cloud. To sum up, GBP/USD is now more bearish. Therefore, you should consider selling the pound sterling today, looking for entry points after short-term increases to 1.3685,1.3715,1.3725, and 1.3760. That is all for today. Price movements on lower timeframes will be analyzed tomorrow.
Good luck!