The Bank of England held its meeting on Thursday, following which the parameters of the monetary policy were announced. As expected, there were no changes. The base interest rate remained at 0.10% and the volume of the bond-buying program remained at £875 billion. At the same time, the Bank of England noted that the further economic prospects of the United Kingdom remain unclear due to the situation with COVID-19, as well as in view of new trade relations with the European Union after Brexit. Once again, I note that in general, the decision and comments of the BoE coincided with market expectations, however, the pound sterling slightly decreased against the US dollar.
Daily
A very typical picture is observed on the daily chart of GBP/USD. As one might have assumed earlier, there were no fundamental changes in the technical picture of the pair on Thursday. And here again, it is worth noting that the quotes are between the Tenkan and Kijun lines of the Ichimoku indicator, which provide support and resistance to the price, respectively. At the same time, given that the blue Kijun line passes right at the key level 1.4000, the passage of this level seems to be quite difficult. Once again, I would like to note that to strengthen bullish sentiments, reaching the Kijun line and the 1.4000 mark is necessary, with the obligatory consolidation above. Only with this scenario of trading development will the pair continue to rise towards another important and significant resistance level, which is 1.4231.
Pound bears have no less difficult tasks, which boil down to the breakdown of strong and technically strong support levels 1.3850 and 1.3800. Difficulties with the price going down are added by the presence of the 50-day simple moving average at 1.3816. In general, while the pair is trading in the range of 1.4000-1.3800, it is not possible to determine clarity with the further direction of the rate at the moment. This means that for those who wish to trade GBP/USD, the prevailing price range should be used. I recommend opening the next purchases after falling to the 1.3870-1.3850 price zone, and lower after the pair drops to 1.3820-1.3800. Selling, of course, is technically competent to open after the price rises to 1.4000, and the price area for opening short positions can be defined as 1.3985-1.4005.
Due to the absence of important and significant releases in today's economic calendar that can affect the price dynamics of the pound/dollar pair, the course of trading will be influenced by technical factors and market sentiment, which are prone to frequent changes. It is likely that after the close of weekly trading, the technical picture for GBP/USD will clear up and we will be able to find more specific and interesting options for entering the market. At the moment, the situation seems rather ambiguous, one can even say cloudy. For those who do not want to take risks and open new positions on the last day of weekly trading, I recommend staying out of the market. Let me remind you that this is also a position.
