Despite yesterday's decline, the British pound is not going to give up and stay in the clutches of the bears for a long time. We will discuss this in more detail in the technical section of this article, but in the meantime, we will talk about the most important fundamental events and events related to the COVID-19 pandemic. In Europe, the spread of coronavirus infection continues to rage, and virologists are already talking about the third wave of the epidemic, which may surpass the first two. It is characteristic that all this is happening against the background of a shortage of vaccines, the manufacturers of which have disrupted the supplies previously agreed with the European Union. Many European countries are going into lockdowns, and the main reason for making such decisions is the very low rate of vaccination of the population. As you know, Europe does not favor the Russian vaccine "Sputnik V", which has already proven its effectiveness and the practical absence of side effects. However, given the difficult epidemiological situation, some countries are ready to buy the Russian vaccine "Sputnik V".
Thus, Austrian Chancellor Kurtz announced the possibility of purchasing about one million doses of Sputnik V for his country. In his words, the main thing is the effectiveness of the drug, not geopolitical ambitions. In the UK, the rate of vaccination of the population is much faster and more successful than that of its EU neighbors, and the latest macroeconomic statistics show that things in the United Kingdom are not as bad as many expected. Market participants were once again convinced of this by the final data on UK GDP for the fourth quarter, which exceeded the expectations of experts. Quarterly, British GDP grew by 1.3%, with a growth forecast of 1%. In annual terms, the indicator also exceeded expectations of minus 7.8% and amounted to minus 7.3%. Today, starting at 13:15 London time, statistics from the United States will begin to be released, where the main attention of investors will be attracted by employment data from ADP. Well, let's look at the charts of the GBP/USD currency pair and try to predict the further direction of the quote.
Daily
Earlier assumptions about the severity and strength of the level of 1.3700 during yesterday's trading were confirmed. This can be judged by the candle for March 30, which has quite long shadows, but the lower one is still slightly larger than the upper one. It is characteristic that the minimum values of yesterday's trading were shown at the level of 1.3704, where the pair found strong support and began to correct, ending Tuesday's trading at 1.3736. Thus, we can once again understand that there is very strong support in the area of 1.3700, and only a true breakdown of this mark will indicate bearish sentiment and a subsequent decline in GBP/USD. Today, at the end of the article, the pound/dollar pair is trading with a slight increase, near 1.3745. Given the positive British statistics and yesterday's daily candle with a longer lower shadow, we can count on today's growth of sterling against the US dollar.
H1
However, as can be seen on the hourly timeframe, at the end of the article, the quote met strong resistance, which is represented by 50 MA and 89 EMA. If the bulls on the instrument manage to pass up these moving averages, then the next obstacle on the way to growth may be the orange 200 exponential, which passes directly above the resistance level of 1.3782. I believe that only a true breakdown of this mark and the return of the pair above 1.3800 will herald bullish sentiment on the instrument and open the way to higher prices.
Trading recommendations for GBP/USD:
Given the not quite unambiguous picture on the two timeframes considered, I believe that there are both purchases and sales of the pair. To open long positions, I recommend taking a closer look at the price zone of 1.3737-1.3717, and an additional signal for purchases will be the appearance of bullish candlestick analysis patterns here. Since it is still unclear whether the pair will be able to overcome 50 MA and 89 EMA, the nearest and most aggressive sales can be considered near 1.3750/60. In my opinion, the pair shows a willingness to break through these moves and move higher, so it is safer to open short positions from the price range of 1.3775-1.3800.
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