As already noted in today's article on the euro/dollar, the US dollar appeared to be the master of the situation at the auction of the past five days. It strengthened against all major competitors, except for the Swiss franc. Thus, the GBP/USD currency pair lost 0.24% on June 7-11, which is quite a bit compared to the same commodity currencies. Nevertheless, the main attention should be paid to the technical picture for a particular pair. Taking advantage of Friday's close of weekly trading, today's analysis of the pound/dollar currency pair will begin with the weekly chart.
Weekly
After the quote reached the level of 1.4247, the bulls on the pound began to see obvious problems with the further movement of the course in the north direction. It is reflected that the players on the increase can not finish the weekly trading above the important psychological and technical level of 1.4200. And this has been happening for three weeks in a row. In part, the situation resembles that observed for the euro/dollar relative to the mark of 1.2200. If you go back to the pound, the last candle of the Doji variety looks like a reversal at all. It is circled on a weekly timeframe, and you can see for yourself. To remove all questions about the further continuation of the upward trend for GBP/USD, it is necessary to confidently close the weekly trading above the last maximum values at 1.4247. Otherwise, the pair risks changing its price direction to a downward one. If the task is completed and the weekly trading closes above 1.4247, the next targets at the top will be the levels of 1.4300 and 1.4375, where the April highs of 2018 were already shown.
The inability to close the weekly trading above 1.4247 will confirm that the upward trend in the pound has come to an end, and the pair is ready to change it to a downward trend. In this situation, the quote will fall into a strong technical and psychological price zone of 1.4015-1.4000, where much will be decided about the prospects of this trading instrument. If you remember, this area served as a strong resistance for a long time and did not let the quote go higher. It will be interesting now to see how this price area will show itself as support. I would venture to assume that this will be a key factor for the subsequent direction of the quote. Naturally, this will be possible only if the price drops to the area of 1.4015-1.4000. In this scenario, it is not superfluous to pay attention to the red line of the Ichimoku Tenkan indicator, which is located at 1.3957 and can provide significant support.
I do not exclude that after leaving under 1.4000, the pair will meet strong support on the Tenkan line and return above 1.4000. In this case, the breakdown of the 40th figure will be considered false, which implies an increase in bullish sentiment for the "British" and another attempt to break above 1.4150-1.4200 and then updates to the latest highs at 1.4247. At the very least, the event is significant. With the main interest rate remaining at the current low levels, the main attention of investors will be focused on the rhetoric of the speech of Federal Reserve Chairman Jerome Powell.
Daily
The GBP/USD pair has been trading in a relatively narrow range of 1.4072-1.4187 for quite a long time on the daily chart. I believe that this is a consolidation before the subsequent choice of direction. If so, the breakdown of 1.4072 will send the quote to the already designated area of 1.4015-1.4000. Suppose the bulls on the pound break through the upper limit of the designated range of 1.4187. In that case, there will be another attempt to rise higher, and most importantly, gain a foothold above the level of 1.4200, followed by a breakdown of the sellers' resistance at 1.4247.
Trading recommendations for GBP/USD:
From all of the above, we can conclude that the pair can move in both directions, which means that there are options for buying and selling. However, given the bearish appearance of the last weekly candle and the inability of the market to gain a foothold above 1.4200, the most excellent preference is for sales. I suggest that you take a closer look at opening short positions after short-term rises in the price zone of 1.4135-1.4150 and higher near 1.4200-1.4225. Confirmation for the opening of sales will be characteristic candle signals near the indicated prices. You can consider buying near 1.4080 and lower after a decline in the strong technical area of 1.4015-1.4000. With both positioning options, I do not recommend setting large goals. Moreover, on Wednesday evening, the market will experience quite volatile and sharp movements. After all, the significance and influence of the Fed on the markets has not been canceled, even if the June meeting turns out to be a passing one.
