The pound pretty much moved from side to side yesterday. And all these hesitation were caused by several factors, which do not include macroeconomic statistics, so there is no point in talking about it. The trades began with a steady growth of the British currency. The increase in optimism was caused by the statements of various officials regarding the course of the endless negotiations between London and Brussels on a trade agreement. All of a sudden everyone started talking about another breakthrough and that all that remained was to resolve the issue of fishing. In general, another portion of optimism. Although all this has already been repeatedly stated before. Over the past two or three years, similar statements were made several times a year, after which the parties announced the next termination of negotiations, since the parties were not able to come to an agreement on some completely unexpected issues, which were not previously discussed. Nevertheless, over and over again, the words about a breakthrough and the fact that the deal is about to be signed, gave the pound a fair amount of confidence, and it is steadily growing.
Nevertheless, literally when the US session opened, the pound returned to the values from which it began the day. This decline was largely speculative, since the market was waiting for results from the Federal Reserve meeting and expected that it would not turn out so good, and according to the good old tradition, in anticipation of important news, the market goes in the opposite direction. However, as soon as the results of the meeting were announced, the pound rapidly fell, since these very results did not coincide with expectations. Contrary to various forecasts, the Fed has not expanded its quantitative easing program. Nevertheless, in just half an hour, the pound jumped, returning to annual highs, at which it was before the US session opened. Quite simply, during his press conference, Fed Chairman Jerome Powell announced that although the volumes of both quantitative easing programs remain unchanged, they will last as long as necessary. Simply put, they are extended indefinitely. And this is nothing more than an expansion of the quantitative easing program. So many fears were justified.
Today, everything will depend on the outcome of the Bank of England meeting, especially since the British central bank is expected to do something similar to what the European Central Bank and the Federal Reserve did. It is clear that we are talking about expanding the quantitative easing program. Moreover, the situation for the Bank of England is not as simple. There is still the possibility that London and Brussels will never be able to conclude a full-fledged trade deal, which means that the British economy, as early as January 1, may experience a real shock. Moreover, these risks are extremely high. So it's worth preparing in advance for the worst. And in this case, the pound will clearly be under pressure. Nevertheless, there is a possibility that the Bank of England may decide to wait for the final results of negotiations, and make a decision based on this. However, such a decision can play a very bad joke in the future. Indeed, even without this, the Bank of England has enough reasons to ease monetary policy. The most significant of these is the coronavirus pandemic.
Yesterday, the GBPUSD pair renewed the local high of the medium-term upward trend, as a result of which the important 1.3550/1.3650 price area was hit. After that, the quote immediately retreated, but by the end of the trading day, market participants returned to the previously affected price area.
As for the market dynamics, the indicator is still high, which is confirmed by the speculative behavior of the quotes.
If we proceed from the quote's current location, we can see that the pair is moving within the area where trading forces interact, at 1.3550/1.3650.
Considering the trading chart in general terms, the daily period, we can see that the quote is at the peak of the medium-term upward trend.
We can assume that the price is still under pressure from the 1.3550/1.3650 area, which may affect the volume of long positions.
A corrective move is considered in case of deceleration within the 1.3550/1.3650 area, where holding the price below 1.3500 will lead to a movement towards 1.3450-1.3400.
If there is no slowdown in the 1.3550/1.3650 area, and the quote manages to settle higher than 1.3655, in a four-hour period, then speculators will have a chance for a subsequent upward move towards the values of 1.3750-1.3800.
From the point of view of a complex indicator analysis, one can see that technical instruments unanimously signal a buy due to the renewal of local highs.
