As already noted in today's euro/dollar review, on the first trading day of the new week, market participants preferred to refrain from risky operations and decided to go to a quiet haven. That is why the US dollar was in high demand among investors yesterday and strengthened in a wide range of currencies, including against the British pound. The reason for such cautious investor sentiment was the COVID-19 delta strain and its mutating varieties. Today's trading will be mainly influenced by the US consumer price index, which will give an idea of the inflationary pressure in the United States of America. Let me remind you that this most important data for the markets will be published at 13:30 London time.
Daily
The technical picture on the daily chart of the pound/dollar pair strongly resembles the one that developed for EUR/USD. Attempts to break through the strong resistance of sellers at 1.3903, where the maximum trading values were shown on July 9, were unsuccessful. Even though the pair managed to raise a little higher and will be marked at the level of 1.3908, it was not possible to gain a foothold near the reached highs, after which the decline began. In fairness, it should be noted that after the fall to 1.3837, the bulls for the pound found the strength to change the situation and minimize the losses incurred before. In particular, this fact is indicated by the long lower shadow of yesterday's daily candle. Regarding the resistance in the price zone of 1.3900-1.3910, I would like to highlight the black 89 exponential moving average, which provided additional and very strong resistance, not letting the quote go higher.
Now about the near-term prospects, which are viewed on the daily chart of GBP/USD. The breakdown of the 89 EMA and the census of yesterday's maximum values with the mandatory closing of trading above will open the way for the pair to a strong technical area of 1.3958, where the lower border of the Ichimoku indicator cloud and the blue Kijun line pass. The pair's entry into the cloud with a Kijun breakdown will give an opportunity to once again test the strength of the strong resistance of sellers in the area of 1.4000-1.4015. For the bearish sentiment on the pair, it is necessary to update yesterday's minimum values at 1.3836, and then test the red Tenkan line for a breakdown. At this stage of time, judging by the daily schedule, the situation is far from certain.
H4
At the time of writing this article, the "Long-legged Doji" candle was formed under the resistance of 1.3903, after which the rate began to decline, which is still being held back by the black 89 exponential moving average. I believe that the results of today's trading on GBP/USD will depend on the ability of a true breakdown of the 89 EMA. They could have depended on the publication of the US consumer price index, which can significantly change the situation and affect the technical picture. At the moment, we will consider both positioning options. However, since the situation is uncertain, I recommend opening deals only after receiving confirmation signals, preferably candle ones. So, the nearest buying zone is 1.3865-1.3840, below the price area near the important and strong level of 1.3800. We are considering selling if bearish models of Japanese candlesticks begin to appear on this or hourly charts on the approach to the resistances of 1.3908 and 1.3955. That's all for today.
