Good day, dear traders!
Today's article on the GBP/USD pair again has to start with the sad events, which are the fault of the ill-fated COVID-19. As it became known at the end of last week, British Prime Minister Boris Johnson said in a tweet that he was infected with the coronavirus. This is not the only high-ranking person who was not spared by COVID-19. Earlier, a positive test was found in the Prince of Monaco Albert II, who is feeling well and is recovering from the coronavirus in his palace.
As for the British prime minister, he is in self-isolation, but will continue to lead the Cabinet through video conferences.
In general, as one publication reports, coronavirus has infected 800,050 people around the world. It should be noted that this figure cannot differ in accuracy, since it is constantly growing.
A new type of coronavirus has been detected in the United Kingdom in just over 22,000 people. The number of fatalities from Covid-19 is approaching 1,500. The main focus, as it should be in such cases, is located in the largest and most populous city in the UK, London.
By the way, according to statistics, the strongest outbreak of the epidemic is now in the United States, where 164,610 people are infected with the coronavirus. Then there are Italy, Spain and Germany. Spain beats all the anti-records. Over the past day, 849 people have become victims of the insidious epidemic!
Okay, this topic is long and very difficult, let's go back to the pair, which, in fact, is the subject of this review.
As it became known this morning, British GDP coincided with the forecasts of economists and showed fairly stable growth in the fourth quarter. I believe that this is a very good indicator in the context of the unresolved issue of the UK's exit from the European Union. Let me remind you that this was the final data, which recorded zero growth in the fourth quarter, and on an annual basis, GDP grew by 1.1%.
But the data on changes in the volume of commercial investments and the balance of payments pleased investors and came out better than expected. At the end of the review, the US received data on the housing price index from S&P, which turned out to be worse than the forecast of 3.2% and reached the level of 3.1%.
The US dollar is under slight pressure right now. However, I remind you that the main macroeconomic data from the United States today is the consumer confidence index.
Well, it's time to move on to the charts of the GBP/USD pair, and since it's still the beginning of the week, let's start with the corresponding timeframe.
Weekly
Many have already buried the sterling and decided that it will continue to fall. To be honest, I had such thoughts, but knowing the speculative and volatile nature of the pound, I warned that everything can be expected from it. This is still a "fruit" that can survive even the most negative and critical situation for itself. What are the memories of the British currency's sell-off by Soros. So what? The pound recovered fairly quickly and began to strengthen.
Even now, after a two-week sharp fall, the pound/dollar has already recouped almost half of the losses. And I believe that this is not the end of the appreciation of the British currency. Most likely, the pound will continue to grow this week, the targets of which may be the 1.2665-1.2695 price zones and possibly higher than 1.2700-1.2730. Judging by the weekly schedule, it is better to look at sales not before the quote is at the designated values.
The technical picture of the cross EUR/GBP also speaks about the pound's growth, where, apparently, there was a turn downwards. We see that the GBP/USD pair has corrected to the level of 1.2243, after which it will liquidate the losses at a decent pace, approaching the opening price of 1.2425.
In the week, we see that the lower boundary of the cloud and the Kijun line of the Ichimoku indicator actively inhibit attempts to resume growth. For bulls on this instrument, it will be extremely important to complete weekly trading within the cloud and above Kijun. This is at least.
Daily
This chart indicates the market's desire to move up. This is very eloquently shown by the long lower shadows of the last two candles.
By the way, the zone for possible and earliest sales is confirmed at this time period of accumulations of used moving averages (50 MA, 89 EMA and 200 EMA) in the 1.2687-1.2747 price area.
I assume that the pair will continue to go up, and I consider the main trading idea for GBP/USD to be purchases after declines in the area of 1.2200-1.2150, as well as in the area of 1.2240-1.2140.
I would like to draw your attention to the fact that such declines should be very short-lived. If the pair is seriously and permanently consolidated under the important level of 1.2200, further growth prospects will be in question.
Good luck in trading!
