In yesterday's trading, the British pound showed growth against the US dollar. And although the strengthening of the "British" was not as significant as the single European currency, the bulls in the pound are still in the game. However, there are several important factors in the technical picture of GBP/USD, which we will discuss later. In the meantime, let's talk about the events that may affect the current course of trading for this currency pair.
So, from the UK at 10:30 London time, the PMI index in the service sector will be released. In the second half of the day at 14:30 (London time) from the United States, data on changes in the number of employees from ADP will be received from the United States, and at 16:00 (London time), an index of business activity in services from the Institute of Supply Management (ISM) will be published. Also, at 18:00 (London time) will be addressed by the President of the Atlanta Federal Reserve Rafael Bostik, and in an hour he will be supported by a member of the Fed's Open Markets Committee and the President of the Federal Reserve of Chicago Charles Evans.
I do not think that these monetary officials of the Fed will tell investors something new and their speeches are unlikely to seriously affect the price dynamics of the US dollar. But the employment data from ADP may well significantly affect the movement of the US currency, as it is perceived by market participants as a leading indicator of official Nonfarm Payrolls. Nevertheless, I believe that this component will play a major role in the further price direction of the pound/dollar currency pair.
On the daily chart, you can see how strong the quote is supported by the blue Kijun line of the Ichimoku indicator. So at yesterday's trading, this line stopped the decline in the quote and turned the rate up. However, it will be possible to seriously count on the retest of strong and important resistance of sellers at 1.4231 only after overcoming the psychological level of 1.4000 and the subsequent true breakdown of the red Tenkan line, which passes at 1.4044. Thus, the nearest key resistance zone on the daily chart can be designated as 1.4000-1.4045. I believe that as long as the pair is trading below 1.4000, there are downside risks. The bears on the pound have their tasks. They need to finally break through the Kijun line and then push through the support at 1.3857.
After the decline of 1.4180-1.3857, the pair corrected to the level of 38.2 on the Fibonacci set, where it is stuck and is considering its further direction. In addition to the Fibo level of 38.2, it is visible how strong resistance to growth attempts is provided by the orange 200 exponential moving average, slightly below which the 89 exponential also passes, which also prevents the pair from further rising. Today, the pair has already risen to 1.3987 but rebounded from this mark. However, now there are attempts to resume growth, but whether they will be successful, the course of further today's trading will show.
Trading recommendations for GBP/USD:
Although the British pound has recently been noticeably strengthening against the US dollar, as can be seen from the results of February trading, the pair's further progress in the north direction will depend on its ability to pass the level of 1.4000 and the Tenkan daily line. The price zone highlighted above represents a fairly strong resistance, and buying under resistance is not our method. Too risky. Given this fact, as well as the fact that the US dollar has recently regained its lost positions in a wide range of currencies, I suggest looking in the selected zone (or slightly lower) for reversal candle patterns on the daily, four-hour, and (or) hourly charts, and then open sell deals with the nearest targets near 1.3860.
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