FX.co ★ Analysis and outlook for GBP/USD on March 12, 2021

The pound sterling acts as usual

Good afternoon, dear traders!

I would like to share with you my opinion about the pound sterling. The currency has a very peculiar character. It is extremely volatile, highly depends on speculative activity, and rarely moves according to particular rules. The currency is unpredictable and often shows significant changes, thus attracting investors. Notably, market participants trade both GBP/USD and cross pairs that contain the pound sterling.

Now, let's take a look at the most important issues that may influence the pair. The coronavirus pandemic is still among the burning issues. In the UK, the vaccination campaign has better results than in Europe. Thus, we can say that the UK left the European Union on time. It is quite possible that due to a more successful vaccination campaign the pound sterling looks stronger than the euro.

Daily

Yesterday, the pound/dollar pair showed a significant rise. Some analysts suppose that the US dollar dropped amid lower yield of US bonds. However, I think that it is not the main factor. Changes in the yield of the US treasuries have various effects on the US dollar. I still believe that technical factors influence currencies more than other factors. Taking into account the pound's character, there is no wonder that it returned to the key level of 1.4000 in an attempt to jump above it. The situation that we can see on the daily chart at the moment, proves the power and importance of the 1.4000 level. After reaching this level, bulls found strong resistance. After that, the market sentiment changed for the bearish one.

Today, the pair also reached the level of 1.4000. However, it slumped from it, and now it is hovering near 1.3924. Moreover, the price may return to the level below the blue Kijun line of the Ichimoku indicator. However, the situation will become clear only at the end of today's trading session.

Traders should also pay attention to such an important level as 1.3900. There is a red Tenkan line below it. However, bulls will hardly change the situation and push the price above 1.4000.

It is too late to open sell positions as the pair has already significantly dropped. At the same time, buy positions could lead to losses. Thus, I recommend remaining cautious and avoiding opening positions in the pound sterling. It is quite possible that on Monday, the market situation will clear up and we will find good points to enter the market.

Have a good weekend