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Good day, dear traders!
Daily
At yesterday's trading, the pound/dollar currency pair showed quite interesting dynamics. The quote rose to 1.2462, however, it failed to gain a foothold above the strong technical level of 1.2453 and turned south. The minimum values of Thursday's trading were shown at 1.2388, however, the bears did not manage to make a true breakdown of the important mark of 1.2400. Also, the trades on June 25 closed at 1.2415, that is, exactly where the Thursday session opened.
As a result, a disembodied doji candle with a longer upper shadow appeared on the daily chart. This is unlikely to indicate further movement of the British currency. In recent days, the US dollar has again become popular with investors amid an increase in the number of COVID-19 infections in several US states, as well as in connection with US trade tensions with China and the European Union.
Yesterday and today's macroeconomic statistics were discussed in more detail in the article on EUR/USD, so I think it makes no sense to repeat it. It is only necessary to add that no reports are scheduled from the UK today, and the fundamental component will be determined by data from the United States, which will begin to arrive, starting at 13:30 (London time). More detailed information can be found by looking at the economic calendar.
If we return to the technical picture on the daily chart, the closing price of today's trading will be very important. The pair's return to the mark of 1.2400, with the mandatory closing of the weekly and daily sessions below these levels, will indicate the further prospect of a bearish scenario. If the trading ends above 1.2463, the option is not excluded, in which the pair will try to once again gain a foothold above the significant psychological mark of 1.2500. However, this can be judged as early as next week, starting from Monday.
H4
In the four-hour timeframe, the pair started to consolidate in the area of 1.2463-1.2388, that is, exactly where the maximum and minimum values of yesterday's trading were shown. There is every reason to assume two options for the development of today's trading on GBP/USD and, accordingly, offer recommendations for opening positions.
Those who regularly read the author's articles remember that on Monday the main trading scenario of the current five-day period was considered a downward one. It was recommended to open short positions on the pair after rollbacks to the area of 1.2500-1.2525. Such a pullback took place, and the bulls on the pound managed to raise the quote even to the level of 1.2541. After that, the forces left the players to increase the exchange rate, which was facilitated by the renewed need for the US dollar as a protective asset. The main reason for this change in market participants' moods is the same - COVID-19. When the situation with coronavirus infections worsens, the US dollar acquires the status of a safe-haven currency and is in high demand.
Conclusion and trading recommendations for GBP/USD:
Taking into account the initial weekly forecast for a decline in the GBP/USD exchange rate, it was recommended to open short positions after short-term rises in the quote to the psychological level of 1.2500. Although such a pullback has already occurred, I do not exclude that today the pound bulls will again try to move the pair in the north direction.
In this situation, I recommend looking at the sales of GBP/USD after short-term rises in the price zone of 1.2460-1.2490, where the 4-hour chart contains moving averages (200 EMA, 50 MA, and 89 EMA), each of which can provide a decent resistance and turn the course down. If there is a true breakdown of the current support of 1.2388 and the price is fixed below this level, you can also try selling the British currency on a pullback to it. In both cases, I do not recommend setting goals and targets and closing trades before the end of current trading. Regarding sales, I recommend that you wait. Let's see how this trading week ends and what shape the weekly candle will take. On Monday, there may be more clarity and more options for trading the pound/dollar currency pair.
Have a nice weekend!
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