FX.co ★ Analysis and forecast for GBP/USD on March 22, 2021

In today's review of the pound/dollar currency pair, we will again touch on the topic of COVID-19, summarize the results of the trading week that has ended, and try to assess the prospects for GBP/USD in the light of the current five-day period. So, universal vaccination against coronavirus is still the most important component to prevent the further spread of COVID-19. At the same time, as it turns out, of many strains of coronavirus infection, virologists consider the "British strain" to be the most dangerous. It accounts for a total of 60 to 80 percent of all infections. At the same time, the "British strain" is considered the most resistant, and not all types of vaccines can counteract it. As for the vaccination itself, in contrast to the European Union, it takes place at a much faster pace in the UK. According to media reports, about 900,000 Britons have been vaccinated in the United Kingdom over the past 24 hours. Needless to say, the indicator is quite impressive.

Weekly

If we go back to the results of last week, then, as already noted in today's article on EUR/USD, all major currencies, except for the Japanese yen, showed a downward trend against the US dollar. In particular, the British pound fell by 0.34% at the auction on March 15-19. These losses can not be considered significant and this is visible on the weekly chart. There is an important point that can not be ignored. We are talking about the mark of 1.4000, where a very strong resistance of sellers is concentrated. As you can see, for three weeks in a row, the bulls fought for the pound to go up. This is a significant psychological and technical level, however, they did not manage to implement their plans.

It would seem that, after the appearance of the circled reversal candle, the "British" expects a downward trend, but below 1.3777, the bears did not manage to continue the decline in the pair. So it turns out that the range in which GBP/USD is traded can be designated as 1.4004-1.3777. In the author's personal opinion, only a true exit from this created price corridor can signal the further direction of the British currency in pair with the US dollar. It is characteristic that approximately in the middle of this range, there is a red line of the Ichimoku Tenkan indicator, around which the pair barrages. At the same time, the support at 1.3777 is strengthened by the lower border of the ascending channel, and the no less significant level of 1.3700 is slightly lower, so to demonstrate the seriousness of their intentions, players need to bring the price down from the channel and lower it below the mark of 1.3700. The bulls have their tasks, the main one at the moment is the breakdown of the strong psychological and technical level of 1.4000. If this task is eventually solved, the pair will head to another important and strong resistance of sellers, which is held in the area of 1.4230. These are the prospects for GBP/USD, judging by the weekly timeframe.

Daily

On the daily chart of the pound/dollar pair, we see that today's trading opened with a small price gap down, after which there are attempts to close the gap. Another detail that is worth paying attention to is the middle line of the ascending channel (dotted), which provides the quote with quite strong support and does not allow the rate to gain a foothold below. However, even going under the middle line can limit the strong support zone of 1.3800-1.3777, where the minimum trading values were shown on March 16 and 3, respectively. As for the resistance, the nearest of them is represented by the red Tenkan line of the Ichimoku indicator, which lies at a significant level of 1.3900. Given the ambiguous technical picture on the two timeframes considered, there are both purchases and sales of the GBP/USD pair. It is worth looking at the nearest sales near the mark of 1.3900, and higher on the approach to the levels of 1.3940, 1.3980, and 1.4000. Purchases of the British currency should be considered from the price support zone of 1.3805-1.3780. You can try to buy from the current prices, but with small goals, near 1.3905. In tomorrow's article, we will look at smaller time intervals, and, if necessary, we will make changes to today's recommendations for GBP/USD.