The pound is still holding up well.
The pound/dollar currency pair strengthened, as a result of yesterday's trading. However, the growth of the quotes was quite insignificant. It is typical that the strengthening of the British currency against the US dollar occurred on the eve of the introduction of new restrictive measures that the Cabinet of Ministers will take to minimize the risks of the spread of the second wave of COVID-19. Oddly enough, investor optimism occurs in the market that a Brexit deal will still be reached. But despite the fact that the coronavirus continues to have a negative impact on the UK economy, and the Bank of England is still considering the option of zeroing the main interest rate or moving it to negative territory, the pound is still holding up well.
Data on the UK labor market was published this morning. As it became known, the unemployment rate was 4.5% (forecast 4.3%) in August, but the number of applications for unemployment benefits last month decreased significantly and to 28 thousand, although the expected increase in applications was 78.8. Simultaneously, the data for August were revised downward and to 39.5 against the originally published 73.7.
Daily
Nevertheless, today's mixed British labor reports put pressure on the currently declining pound. The GBP/USD pair is currently trading near 1.3030, above the psychological mark of 1.3000. Furthermore, as a result of the current decline, the quote rolled back to 50 simple moving average broken the day before, where it can get support and begin to recover. If this fails to happen and today's trading closes below 50 MA, the breakdown of this moving average will have to be recognized as false, which will give grounds to prepare for a subsequent decline in the British currency. Therefore, today is very important for the GBP/USD pair, given today's publication of the US consumer price index, which will be held at 12:30 (UTC+00).
H4
The current range in which the pound/dollar is traded can be designated as 1.3081-1.2845. The pound bulls failed to complete yesterday's trading above the strong technical level of 1.3047, which was repeatedly mentioned earlier. But as long as the pair is trading above 1.3000, there are still opportunities for continued growth. However, the bullish scenario will only be confirmed if the resistance of sellers in the area of 1.3080 is overcome and fixed higher.
As we can see, the pair once again demonstrates excellent technique. Following the breaking of the resistance level of 1.3005, a clear pullback was given to it, after which the quote turned to continue the upward dynamics and reached the level of 1.3081.
If we observe the trading recommendations, the main trading idea is to buy the "British," which is best considered after another decline to the broken resistance level of 1.3005. In my opinion, it is best not to exclude short-term flight of the price to the moving averages, which are in the area of 1.2955-1.2935. However, you need to carefully monitor the behavior of the price in this scenario. If the pair consolidates at 1.3000, the upward scenario will be under a big question and may be revised.
