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Boris Johnson hospitalized, Elizabeth II addresses the nation.
Hello, dear traders!
The GBP/USD currency pair ended the previous trading week with a decline. However, it turned out to be quite insignificant. We will return to the technical picture of the pound/dollar pair later, but for now, we will talk about important events related to the COVID-19 epidemic.
As it became known, British Prime Minister Boris Johnson was hospitalized for a more in-depth medical examination for a new type of coronavirus. Nevertheless, the British Prime Minister continues to manage the government remotely via video conferences.
According to some reports, the health of Queen Elizabeth II of Great Britain is also under threat, as one of the courtiers tested positive for coronavirus, and her son is already ill.
Meanwhile, Elizabeth II made an address to the nation, in which she thanked the British for their courage and patience and promised that everything will be fine. Judging from the TV picture, Queen Elizabeth II looks pretty good. It is characteristic that for 68 years that she sits on the throne, this is only her third official address to the nation. Understand the importance of the moment!
If we go back to the pandemic, the British leadership echoes its older brother, the United States, and believes that the peak of the epidemic will come within 1-2 weeks. God grant that this will be the case and the epidemic will go down.
Now let's turn directly to the technical picture for the pound/dollar currency pair, and start with the weekly chart.
Weekly
As noted at the beginning of the article, the British pound got off lightly and suffered minor losses against the US dollar. Moreover, there were even attempts to grow, but the lower border of the cloud and the Kijun line of the Ichimoku indicator curbed the bulls on the pound and did not allow them to raise the quote above the resistance level of 1.2480.
After reports of Boris Johnson's hospitalization, sterling opened the week with losses and fell to 1.2208. In past reviews of this currency pair, it has been repeatedly noted that the mark of 1.200 is very strong and extremely important for trading participants. The current case is another confirmation of this.
At the moment, the GBP/USD pair is showing growth and is trading near 1.2310. If the players on the increase manage to continue moving the quote in the north direction, the nearest goal may be the lower border of the Ichimoku cloud, which passes at 1.2450. The longer-term goal will be the maximum values of the week before last at 1.2485. However, this may happen later, not at the auction of the current five-day period.
If the pair's bulls manage to close the weekly trading within the Ichimoku cloud, it is possible that in the future the pair will head to its upper border, which passes at 1.2668, just above, at 1.2680, and there is a 50 simple moving average.
Bears have a very difficult task with this tool. They need to lower the rate to the support of 1.1410 and breakthrough this level, closing trades under it. Judging by the weekly timeframe, it is more likely to predict the growth of the pair.
Daily
In this time period, the upward prospects of the pound are also seen, however, for this purpose, it will be necessary to break through the resistance of sellers at 1.2480/85. If it is possible for the players to increase the rate, the next target at the top will be 50% and 89 exponential moving averages, which are located near 1.2650.
I consider the strong technical level of 1.2725, which is directly at the 200 exponential, to be the further mark of a possible rise in the pair.
Conclusion and recommendations for GBP/USD:
Compared to the single European currency, the British pound technically looks less vulnerable and more prone to growth. In other words, if both the euro and the pound declined against the US dollar, the decline of the "British" will be more limited. Conversely, in the event of the growth, sterling will strengthen against the USD more strongly than the single European currency.
If today's article recommended selling for the euro/dollar, then you can try to buy the GBP/USD pair with a short-term decline in the area of 1.2275-1.2255 and (or) after the breakout of the level of 1.2323. The indicated targets for possible growth can be considered for opening short positions. Confirmation of this will be the reversal bearish models of Japanese candlesticks.
Good luck!
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