The picture for the pound/dollar currency pair is somewhat different than for the euro/dollar. There is no doubt that the pressure on the British pound has recently been exerted by the deterioration of the epidemiological situation associated with the increase in the number of infections with the COVID-19 delta strain. In this regard, the British government, headed by Prime Minister Boris Johnson, is forced to introduce new restrictions that will undoubtedly affect the economic recovery of the United Kingdom. If COVID-19 again makes its adjustments to the pace of recovery of the British economy, this will become a very negative factor that will continue to dominate the British currency exchange rate. From today's macroeconomic events that can affect the price dynamics of GBP/USD, it is worth highlighting the data on initial applications for unemployment benefits in the United States, which will be published at 13:30 London time. In the meantime, we will briefly consider the price charts of the pound/dollar currency pair and pay attention to some technical nuances.
As we can see from the weekly scale, the GBP/USD pair has been strengthening in the last two weeks. And the recovery has begun from the level of 1.3611. It has been repeatedly noted that such levels as 1.3800, 1.3700, and 1.3600 are very important for market participants and have a significant impact on the price dynamics of this trading instrument. The pair conducts trading of the current five-day period in a descending cycle. However, the technical picture may change significantly for today and tomorrow. In this regard, a lot will depend on the attitude of investors to the US currency. Let me remind you that market participants are still concerned about the timing of the start of the curtailment of the quantitative easing program. If we return to the technical component on the weekly chart, the support is in the area of 1.3678, where the purple 50 simple moving average is located.
Strong resistance of sellers is located near the blue Kijun line of the Ichimoku indicator, near 1.3900. As repeatedly noted earlier, this level is very strong and has not allowed the pair to go higher for a long time. If we consider that there is a strong resistance level at 1.3980, and the iconic technical zone 1.4000-1.4015 is slightly higher, then, in my subjective opinion, only the consolidation of the pair above 1.4015 will create real prerequisites for the subsequent growth of the quote. In the meantime, I think it is advisable to trade the pair in the range of 1.3900-1.3700. At the same time, you need to enlist the support of the corresponding candle signals at smaller time intervals and only after that open positions on this trading instrument.
But looking at yesterday's daily candle, with a particularly long lower shadow, more prerequisites remain for movement in the north direction. However, the pair is facing a meeting with very strong resistances in the form of 50 MA, the Tenkan red line, and the lower border of the Ichimoku cloud. If bearish reversal patterns of candle analysis appear in this area on the daily chart, this will be a signal that the bulls for the pound cannot overcome the zone of 1.3800-1.3815, which means that the pair will get all the technical prerequisites for a reversal in the south direction. It is the picture for GBP/USD at the moment.
