14.07.202009:00 Forex Analysis & Reviews: Analysis and forecast for GBP/USD on June 14, 2020

Hello, dear traders!

In contrast to the single European currency, the British pound declined significantly yesterday in pair with the US dollar. Market participants were not impressed by the speech of the head of the Bank of England, Andrew Bailey. At least, so far, investors see bearish notes in the speeches of the chief British banker. In short, yesterday's speech by Andrew Bailey was mainly devoted to the issue of lending for the economic recovery of the United Kingdom from the negative consequences of COVID-19. In truth, nothing new or encouraging was said. Perhaps this factor was the decisive factor in the fall of sterling.

However, today is a much more important day for the pound/dollar currency pair in terms of the release of macroeconomic data. Let me remind you that at 07:00 (London time), a large block of statistical indicators was published from the UK, among which there are data on GDP, the total trade balance, as well as reports on industrial production.

The main event from the US will be the publication of the consumer price index, the indicator will be released at 13:30 London time.

Daily

Resistance in the area of 1.2662-1.2668 turned out to be very strong and did not allow the pound bulls to continue the rate rise. For three trading days, the players on the increase tested the strength of this price zone and capitulated yesterday.

Here you need to remember the highlighted candle model "tombstone". As noted in previous reviews of GBP/USD, the bullish scenario will only get a chance to continue if the "tombstone" candle is absorbed. This is exactly what did not happen, so yesterday's fall of the pair is not accidental or unexpected.

Although three candles closed above the 200 exponential moving average, the pair returned to this moving yesterday. The current support for the quote is provided by the Tenkan line of the Ichimoku indicator, slightly below which the Kijun is located. If the pound bears manage to push through these lines, the next target will be the 89 exponential moving average, which is at 1.2496. The pair may find support here and return above the important psychological and technical level of 1.2500. However, this will be little consolation for the players to increase the rate.

If the 89 EMA is broken, the pound/dollar risks falling to the area of 1.2436, where the minimum values of July 3 are marked, as well as the upper limit of the daily Ichimoku cloud and the 50 simple moving average passes.

For further implementation of the bullish scenario, it is necessary to pass the levels of 1.2662, 1.2668, and 1.2686. In this case, it is necessary to be fixed above the last mark. But even in this scenario, we will have to test the strong technical zone of 1.2700-1.2730 for a breakdown.

In the current situation, it is difficult to give specific trading recommendations, since there is considerable uncertainty. In my personal opinion, it is better to plan purchases from the depth, after declines in the price zones of 1.2500-1.2490 and 1.2440-1.2420.

If we talk about sales, the opening of short positions will be relevant in the case of another rise to the area of 1.2660 and the appearance of reversal bearish candle signals on the four-hour and (or) hourly charts.

Good luck with trading!