05.07.202112:34 Forex Analysis & Reviews: Analysis and forecast for GBP/USD on July 5, 2021

At last week's trading, the GBP/USD currency pair showed a downward trend. However, it can not be called strong and (or) confident with all the desire. There are several technical issues that we will talk about a little later. For now, let's briefly talk about other events. As has been repeatedly noted earlier, the main event of the past five days was the data on the US labor market for June, which the Employment Department of this country published on Friday. You can find out more about American labor reports in today's article on the euro/dollar. The only thing I would like to draw attention to is that the labor data for June turned out to be ambiguous and did not serve as support for the dollar. Now also briefly about the ill-fated topic of COVID-19, which continues to be one of the most important in the world's media. As you know, in some countries (and even regions), another strain of coronavirus is raging with might and main. If we touch on the European region, the greatest activity and the number of daily infections are observed in Portugal. The new delta strain still spares the UK and the USA and does not have a significant change in the epidemiological situation. In both countries, the vaccination campaign is successfully continuing and there is a gradual economic recovery from the COVID-19 pandemic.

If we touch on the most important events that can affect the price dynamics of the GBP/USD currency pair, then the main thing should certainly be considered the publication of the minutes of the last FOMC meeting, which will be held this Wednesday evening. From today's macroeconomic reports, I recommend paying attention to the PMI index in the UK services sector, which will be presented to investors at 09:30 London time. That's it, let's go to the analysis of graphs.

Weekly

So, as a result of the decline in the last five-day trading, a candle with a not very impressive bearish body and a long lower shadow appeared on the weekly chart of the pound/dollar pair. Last week's closing price was 1.3829. It is above the important mark of 1.3800, but below the strong and significant technical level of 1.3860. The key resistance of sellers remains in the area of the most important psychological and technical level of 1.4000, near which there is also the red line of the Tenkan of the Ichimoku indicator. Strong and significant support is in the area of 1.3785-1.3730. A slight decline, a long lower shadow, and the closing of the week above 1.3800 do not exclude the subsequent strengthening of the pair. However, to do this, it is necessary to return trading first above 1.3860, and then pass the important levels of 1.3900 and 1.3930 on the rise. It is the minimum task for the bulls for this trading instrument. A breakdown of the level of 1.3730, where the minimum values of the previous trading week were shown, will create prerequisites for a subsequent decline to the levels of 1.3700 and 1.3670. At the same time, in the event of a breakdown of the last level, the bearish sentiment for the pair will significantly strengthen and we may see lower levels.

Daily

As already noted, Friday's reports on the US labor market put pressure on the US currency, as a result of which a circled "Bullish Absorption" model appeared on the daily chart. Given that this model got its start in a strong support zone, I do not exclude the subsequent growth, which will still be corrective. At the same time, it is possible to trade in a relatively small trading range, after which the pair will decide on its further directions. The tasks of the opposing sides remain the same. To control the course of trading over GBP/USD, bulls need to raise the quote above 1.4000, and their opponents need to lower the rate below 1.3730, 1.3700 and break through the strong support level of 1.3670. At the moment, it is difficult to identify specific and unambiguous trading recommendations, so it is better to consider both positioning options for the time being. Sales are technically justified after short-term rises to 1.3865, 1.3905, and 1.3930. Purchases look good from the price zone of 1.3810-1.3785. In tomorrow's article on the pound, we will consider smaller time intervals and make changes or additions to today's recommendations.