19.01.202113:04 Forex Analysis & Reviews: Analysis and forecast for GBP/USD on January 19, 2021

Today's article on the pound/dollar currency pair will be devoted mainly to the technical component, and taking into account the recent completion of weekly trading, we will look at the corresponding timeframe. I have repeatedly noted that, in my personal opinion, the weekly chart is the strongest in terms of working out certain technical signals and determining the further direction of the price.

Weekly

Thus, following the results of trading on January 11-15, a very interesting candle with a small bullish body and quite large equidistant shadows appeared on the weekly time interval. Looking at this candle, we can conclude that market participants are currently in thought and can not decide on the further direction of the British currency. In principle, this candle can be considered a reversal, especially considering that it appeared at the very peak of the market after the unsuccessful attempts of the bulls on the pound to overcome a very strong technical level of 1.3700. I would like to emphasize that this week will be extremely important for GBP/USD, and the further direction of the exchange rate may depend on how the trading of these five days ends. For the growth to continue, players on the increase need to pass strong resistance of sellers in the area of 1.3700 and close the week higher. In this case, the "British" can continue to strengthen with the nearest targets in the area of 1.3800-1.3820. To implement a bearish scenario, it is necessary not only to update the previous weekly lows at 1.3450 but also to break through the red line of the Tenkan indicator Ichimoku. The task is not easy, however, when was everything easy and simple? Judging by the weekly chart and the shape of the last candle, it is not possible to make an unambiguous conclusion about the further direction of the price. Both scenarios have approximately equal chances of being implemented.

Daily

The strong technical level of 1.3520 has been mentioned several times before. At yesterday's trading, this mark once again demonstrated its strength and significance for market participants. Having reached the level of 1.3518 on the decline, the pair found strong support and began to recover the losses incurred before. As a result, a candle with a particularly long lower shadow and a small bearish body appeared on the daily chart. Usually, after the appearance of such candles, the quote shows growth, which is observed at the end of this review. It is necessary to note the role that the red line of the Tenkan indicator Ichimoku played as support. Yesterday's trading closed slightly above this line, and today's rise began from it. Since today no macroeconomic reports are expected for the GBP/USD currency pair that can affect the price dynamics of this instrument, I believe that trading on the pair will be influenced by technical factors, market sentiment, and information background. Moving on to the trading recommendations for GBP/USD, it is necessary to take into account that the pair have already made a long way in the north direction, so it is worth opening purchases with small targets in the area of 1.3660. But it is better to look for points for opening long positions on the pound after a minor and short-term corrective pullback to the price zone of 1.3600-1.3580. However, it is far from a fact that such a pullback will take place, the pair shows a positive attitude and is steadily strengthening. Aggressively and riskily, you can try to buy the British currency from current prices, hiding a protective stop-loss order under yesterday's lows of 1.3518, and not everyone can afford it. As for sales, the basis for opening short positions will be bearish candlestick signals under the level of 1.3700. If they appear, we sell GBP/USD with the nearest targets near 1.3600.