26.05.202010:55 Forex Analysis & Reviews: Analysis and forecast for GBP/USD on May 26, 2020

Hello, traders!

Before we analyze the technical picture of the GBP/USD currency pair in detail, we would like to note that a whole political scandal has been fanned in the UK. The fact is that Dominic Cummings, who is the chief adviser to British Prime Minister Boris Johnson, violated the quarantine regime at the height of the COVID-19 epidemic. Cummings took his five-year-old son to his grandparents. The reasons for this action were allegedly appearing symptoms of coronavirus in Cummings and his wife. For the sake of the child's safety, Johnson's chief adviser decided to take the son to his parents. The piquancy of the situation is that Dominic Cummings himself strongly advocated the introduction of quarantine in the UK. Now an official investigation has been launched into the official's actions. While the British public is outraged by Cummings' action, Prime Minister Boris Johnson said that it was the fatherly feelings of his adviser, but he also understands the British indignation.

From today's events that could affect the price dynamics of the pair pound/dollar, I would like to mention the speech of the member of the monetary policy committee of the Bank of England, Andy Haldane, which will be held at 10:00 (London time), data on the US housing market, which is scheduled for publication at 14:00 (London time) and consumer confidence of Americans in at 15:00 (London time).

Daily

The downward scenario mentioned in yesterday's review of GBP/USD has not yet been confirmed. The support at 1.2165 was strong enough to keep the quote from falling. As a result of yesterday's trading, a small bullish candle appeared on the daily chart, and it turned out to be inside the body of the previous bearish candle. In fact, this is a candle model "Harami", after the appearance of which there is often a strengthening of the exchange rate, which is happening at the time of writing this article.

Now the pound/dollar pair is trading with an increase near 1.2270 and is testing a 50-simple moving average for the breakdown.

If the ardor of the bulls for the pound does not run out and the quote continues to rise, the nearest target on the daily timeframe will be the upper border of the Ichimoku indicator cloud at 1.2294 and the significant mark of 1.2300. I believe that the minimum task for players to increase the rate will be to close the daily session above 50 MA. If the GBP/USD bulls manage to finish trading above 1.2300, there will be even more reasons for further strengthening of the quote. In this case, as noted earlier, the next target at the top will be the Kijun line, which runs at 1.2357.

If the bulls lose their current growth and the current one has a long upper shadow, and the closing price is outside the limits of the Ichimoku cloud, further upward prospects will be very problematic.

H4

After the opening of today's trading, the pair went up 50 MA, and at the moment breaks through the black 89 exponentials. Judging by the strong upward dynamics, the pound is likely to continue strengthening, during which it will test the resistance level of 1.2294 and the mark of 1.2300 for a break. I don't see any good options for potential purchases on this chart. Unless the rollback to the broken 50 MA, in the area of 1.2200. However, such a significant pullback may already be a change of direction, so it is better not to rush yet. But the basis for selling will be bearish candlestick signals that may appear in a strong resistance zone of 1.2290-1.2305.

H1

On the hourly chart, the pair more than confidently overcame the 200-exponential moving average, but slowed down near 1.2273 and is preparing to give a pullback. If this happens, then, after the decline to the area of 1.2250-1.225 and the appearance of bullish candle analysis models there, you can try buying the British currency. I recommend setting the nearest targets for potential purchases near 1.2300. Fixing short positions is better planned in the area of 1.2215-1.2200.

Good luck!