In today's article on the pound/dollar pair, we will consider the two largest timeframes to try to determine the further direction of the British pound against the US dollar.
Monthly
As you can see, following the results of February trading, the GBP/USD currency pair strengthened quite well, however, several technical points need to be paid attention to. The growth factor itself speaks in favor of the bulls in the British currency, during which the resistance of sellers at 1.3757 was broken, as well as the black 89 exponential moving average. At the same time, some nuances call into question the further strengthening of the "Briton". These include the closing price of the February trading below the important and quite significant psychological level of 1.4000, as well as a fairly significant upper shadow of the February candle. I would also like to draw your attention to the fact that on the monthly chart, the pound/dollar pair is trading within the Ichimoku indicator cloud, which itself is an area of uncertainty.
This month, the upper limit of the cloud is 1.4118. In the event of a close of trading at the beginning of the month above this mark, and therefore an exit up from the cloud, you can count on the subsequent strengthening of the British currency. If the pair ends the trading of the first spring month with a decline and closes them at 89 EMA, the breakdown of this exponent will have to be considered false and prepare for a subsequent decline in the exchange rate. However, as can be seen on this chart, several more strong resistances of sellers, in particular 1.4344 and 1.4375, pass above the February highs of 1.4231. I believe that only the breakdown of the last mark will give the final answer in favor of bullish sentiment and the subsequent growth of GBP/USD. In turn, the bears on the pound need to push through the support at 1.3565 and close trading in March under this level. If this happens, you can prepare for a subsequent bear market for this currency pair and consider selling options, most likely medium-term. Although the market sentiment changes so quickly and often that it is still not worth making decisions about opening medium-term positions.
Weekly
Following the results of the trading of the last five days, a reversal model of the candle analysis "Shooting Star'' appeared on the weekly chart. The chances of working out this model are enhanced by the fact that it appeared at the very end of the upward movement, as well as its extremely long upper shadow. Now the task of the bulls on the pound is extremely difficult. To break this bearish candlestick pattern, it must be absorbed by growth, which implies the closing of trading on March 1-5 above the previous maximum values of 1.4231. I fully assume that in the case of a downward trend scenario, the pair may be supported by the Tenkan red line, which runs at a strong technical level of 1.3840. However, taking into account the last weekly candle, I consider the main scenario for the pound/dollar pair to be downward, and the likely support in the area of 1.3840 should be considered as a corrective rebound and the opportunity to open short positions at more interesting prices. At the moment, sales of GBP/USD should be planned on the pair's attempts to return above the key psychological level of 1.4000. I will try to give smaller timeframes and more accurate trading signals in tomorrow's article on GBP/USD.
