Unlike the single European currency, the British pound showed growth against the US dollar at yesterday's trading. Perhaps this was the result of the last meeting of the Bank of England, at which the regulator indicated a more "hawkish" position. Although the main interest rate did not change and remained at the level of 0.1%, two members of the Monetary Policy Committee spoke in favor of tightening further steps and curtailing the bond purchase program as soon as possible. It seems that the Bank of England intends to follow in the footsteps of the Fed, and we will find out what will happen soon. As already noted in today's article on the euro/dollar, the main event today will be the speech of the head of the US Federal Reserve System (FRS) Jerome Powell with the semi-annual report on monetary policy. This important event may have a significant impact on the price dynamics of the GBP/USD pair.
Daily
As can be seen on the daily chart of the pound price, the previously broken support of 1.3725 now represents very strong resistance. It can be considered very strong since the orange 200 exponential moving average and the red Kijun line of the Ichimoku indicator are located near this mark. However, if the bulls on the pound manage to raise the rate above 1.3725, they will face no less difficult tests in the area of 1.3760. As you can see, here is the lower border of the daily cloud of the Ichimoku indicator, as well as the blue Kijun line, which is located directly on it. The key support is at the strong technical level of 1.3600, just below which there is another support level, where the minimum trading values were shown on July 20 of this year. Thus, the task of the players to lower the rate is seen as a true breakdown of the strong support zone of 1.3600-1.3570, with a mandatory consolidation under 1.3570. The bulls need to return the rate above 1.3725 and also to raise the quote within the Ichimoku cloud, with an indispensable consolidation in it.
H1
As it has been noted more than once, it is most rational to look for points for entering the market on the hourly chart, which we will try to do now. As can be seen on the "hour", the pound/dollar pair is trading on this timeframe in a downward trend. It is evidenced by the dark blue resistance line drawn at points 1.3805-1.3727. In addition, I recommend paying attention to the gradually decreasing highs. This factor indicates the weakness of the bulls and confirms the bearish trend. So today, before reaching yesterday's highs, the pair turned in a southerly direction and shows a fairly significant decline.
It is always risky to sell on such strong movements. It is like jumping into an outgoing train on the move. At any time, a corrective rebound may occur, which will lead to the closure of the position on the stop. In this regard, I suggest waiting for a possible rebound upwards, after which we consider options for opening short positions in the area of 1.3685-1.3700. Higher sales can be planned on the approach to the hourly resistance line, near 1.3715. Purchases will become relevant in the event of a breakdown of the designated resistance line and consolidation above it. After that, on the rollback to the broken line, you can plan to open long positions with small targets near 1.3740. I also do not recommend setting large sales goals yet. Much of today's trading will depend on the rhetoric of Fed Chairman Jerome Powell's speech.
