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The military special operation in Ukraine continues to excite the minds of investors and influence the course of trading. It would seem that the COVID-19 pandemic has only begun to decline, so a new attack is a conflict between Russia and Ukraine. At the same time, it is completely unclear how long it will last and what troubles it will bring. This military special operation and isolation of Russia further aggravate the supply chain already disrupted by the COVID-19 epidemic, and in general, may lead to another economic crisis. As recently as the day before yesterday, US President Joe Biden has already announced an embargo on Russian hydrocarbons, including oil and gas. But many European countries are completely dependent on Russian gas, for example, Bulgaria. And British Prime Minister Boris Johnson said that it is not possible to immediately abandon energy resources from Russia. In general, the situation is quite complicated, and the current year seems to be very stressful.
Today’s economic calendar contains a lot of important macroeconomic data that can affect the price dynamics of the GBP/USD currency pair. I would like to draw the attention of traders that often the British pound supports the price dynamics of the single European currency and moves with it in unison. The euro is having a hell of a day today. Let me remind you that at 12:45 the ECB will make its decision on interest rates, and at 13:30 (London time) Christine Lagarde’s press conference will begin. Most likely, the rates in the eurozone will remain unchanged, so the main attention of investors will be turned to the rhetoric of the speech of the head of the ECB. This all means that the “Briton” can reach for the euro, but in which direction will depend on the market reaction to Lagarde’s speech. In the case of more “hawkish” notes, the GBP/USD will likely continue the rise that started yesterday in the wake of the euro/dollar.
But there is one very important point here. The US dollar will also not remain without fundamental influence today, and this will directly affect the price dynamics of the pound/dollar pair, even if the sterling ignores the results of the ECB meeting and the speech of its president. I strongly recommend paying attention to the American data on applications for unemployment benefits and especially the US consumer price index, which will be published today at 13:30 London time. As for the technical picture, it is undoubtedly a very important factor. I advise you to pay attention to two points. First, it is a reversal in its form and essence, highlighted on the daily chart, the Doji candle for March 8. Second, this is the beginning of its development and yesterday’s bullish candle with a closing price above 1.3168. The second point allows us to conclude that the support level of 1.3168 was falsely broken, which means that with the highest probability the pair has every chance of continuing the upward dynamics.
Today, at the time of writing, we see that the attempts of the sterling bear to return trading on GBP/USD under their control are failing. After a slight decline and attempts to return the quote under 1.3168, the pair found strong support at 1.3142 and turned up. The daily candle has already started to form a bullish body, but right now the rate has returned to the opening price of today’s trading. Today is a very difficult day for making trading decisions, so for beginners and those who do not want to take risks, I recommend staying out of the market and watching what is happening from the outside. I recommend other traders to look for options for purchases at current market prices or after short-term declines in the price zone 1.3168-1.3160. I would like to note once again that today’s events planned in the economic calendar can seriously affect the price orientation of the pound/dollar pair, so be careful and attentive.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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