Hello, dear traders!
Let's start today's review of the GBP/USD pair with the fact that the UK is expected to have serious problems in the coming winter period. The point is that energy prices are so high that the traditionally prosperous British will face tough times. While British Prime Minister Boris Johnson continues to dance to the tune of the United States, Great Britain risks being left without the necessary heating. In other words, Britain is braced for a cold winter, during which its citizens will have to hide under duvets and rugs. All this stems from the government's extremely aggressive policy regarding sanctions against Russia. Now let's consider the situation from a technical point of view, starting with the analysis of the previous trading week.
Weekly chart
Last week, pound bulls managed to turn the tide in their favor. This can be confirmed by the last weekly candlestick with a long lower shadow and a bullish body. After the formation of such candlesticks, the quote usually rises. However, this is not the case. The pound sterling is still trading under strong selling pressure against the US dollar. It is quite difficult to guess what will happen next. However, I still believe that the most likely scenario in the short term is bullish. If the pound sterling breaks through the support level of 1.1874, this scenario will be canceled. In the meantime, I expect the GBP/USD pair to form reversal candlestick signals at the bottom of the market. In this case, it will be possible to open long positions on the British pound. That's all for today. Tomorrow we will consider the pair's dynamics from a technical point of view on smaller time frames.
Have a good day!