FX.co ★ Analysis and forecast for GBP/USD on May 27, 2021

Starting the GBP/USD currency pair review, I would like to note that there is uncertainty in the foreign exchange market for most of the major pairs. It is written by the analytical departments of many large commercial banks, and it isn't easy to disagree with them. The main confusion in trading of dollar (and not only) pairs is caused by inflation in the United States, which shows sharp jumps. Although the leaders of the Federal Reserve System (Fed) of the United States consider the sharp spikes in inflation a temporary phenomenon, some market participants have already begun to lay down the volume of the quantitative easing program in the United States, which may lead to an increase in interest rates. It has already been mentioned in several previous materials. Let me remind you that, in my personal opinion, in the current situation, which is still far from the coronavirus state of the world's leading economy, the Federal Reserve is unlikely to make any changes, in particular, to tighten its monetary policy. If you look at the economic calendar, some inflation data from the United States will be published tomorrow. As for today, at 13:30 London time, reports on initial applications for unemployment benefits, orders for durable goods, as well as revised data on US GDP for the first quarter will begin to be released.

Daily

After unsuccessful attempts by the bulls for the pound to continue the rise of the rate and break through the strong resistance of sellers in the area of 1.4230, two circled Doji candles appeared on the daily chart, which showed the failure of the upward scenario at this stage of time. This assumption was confirmed during yesterday's trading, where the pound/dollar currency pair showed a downward trend and closed the Wednesday session at 1.4114. Thus, the quote again fell into the nearest and quite strong support zone of 1.4120-1.4100. Today, the bears on the instrument tried to continue to implement their downward scenario. However, we were able to lower the rate only to 1.4090, from where the pair began to recover actively and is trading near 1.4126. Naturally, the main events in the GBP/USD price movement will begin to occur after 13:30 (London Time), when the macroeconomic reports from the United States will be issued.

In the meantime, the strong resistance of sellers is concentrated in the area of 1.4174-1.4232, where the maximum values of several trading days are marked. The nearest support is still in the area of 1.4120-1.4100. However, the pair has already fallen below 1.4100, which increases the probability of a breakdown of this level and a subsequent decline to the next price support zone of 1.4015-1.4000. In my subjective opinion, in the case of a decline in the designated area, it is there that the further direction of the pound/dollar pair will be decided. If we focus on the daily chart, then I suggest that the same price area of 1.4020-1.4000 is considered a reference point for opening purchases, or it is more aggressive and risky to buy from current prices. But for sales, there are several options. The nearest opening of short positions looks good on the approach to yesterday's highs of 1.4174, and above that, you can look at sales near the levels of 1.4209 and 1.4230. With both positioning options, it is better to first enlist the corresponding candle signals on this or lower timeframes and only then open positions in one direction or another.