Hi, dear traders!
The trajectory of GBP/USD was mixed throughout last week, with no clear trend emerging in the end.
Weekly
According to the weekly chart, a Long-legged Doji candlestick pattern emerged on February 7-11. The pair climbed to 1.3642 and descended to 1.3489 before closing at 1.3555 at the end of the week. It is unclear whether the situation favors bullish or bearish traders. GBP/USD also remains within the Ichimoku cloud near its lower boundary. Near the lower boundary lies the black 89-day EMA line and the red Tenkan-Sen line of the Ichimoku cloud. These lines could provide support to the pair, as well as serve as an obstacle for bears trying to push the pair below the cloud.
If the pair breaks below the Ichimoku cloud, it could descend to the orange 200-day EMA line at 1.3395. A breakout below the 200 EMA would open the way towards the support at 1.3349. This is likely the limit for the pair's downward movement this week. The main goal for bullish traders this week is breaking above the resistance at 1.3640, which was tested by GBP/USD last week. A successful breakout above this level would allow the pair to rise towards the 50-day SMA at 1.3715 and the strong technical level of 1.3700. GBP/USD is on the downtrend at the beginning of this week, but the situation could still change by Friday.
Daily
The dominant trend for GBP/USD is bearish, as indicated by the long upper shadows of the previous daily candlesticks. At the time of writing, the pair was in negative territory - it tested the key level of 1.3500, but bounced upwards. Stronger downward pressure could send the pair below 1.3500 and into the Ichimoku cloud. This would likely intensify bearish sentiment and push the pair further down. Currently, traders are recommended to open short positions after the pair retraces upwards towards 1.3535 and 1.3550. Long positions could be considered if the pair approaches the strong technical level of 1.3460.
Good luck!
