On Wednesday, GBP/USD retraced up slightly, leaving the narrow sideways channel of 1.2980-1.3043. Daily volatility totaled 74 pips. The corrective move began when the pound/dollar pair failed to break through the swing low around 1.2980. The pair's technical picture is similar to that one of EUR/USD. The Kremlin's new peace talks offer provided additional support to the euro and the pound on Wednesday. As a reminder, geopolitical developments in Ukraine are one of the primary reasons for weaker risk assets. Whenever positive news on this front comes in, EUR and GBP may show growth. Alas, the overall situation in Ukraine is only getting worse due to intense military activity in the Donbas. So far, there have been no reasons for stronger EUR and GBP. Above all else, neither trend line nor channel has formed in the M30 time frame.
In the M5 time frame, the sideways move continued on Wednesday. The price remained within the 1.2981-1.3049 channel after briefly consolidating slightly above it. That move was not enough to be considered the beginning of a bullish correction. Nevertheless, a number of trading signals were made during the day. The first one had been created even before the opening of the European session. The quote bounced off 1.3042 but remained to hover around the entry point at the opening of European trade. It was time to go short. Later, the price fell to 1.2993 and rebounded. So, market players had to close their short positions and open long ones. In a matter of hours, the pair returned to 1.3042 and broke through 1.3049. Although the bullish move stopped, the bearish one did not begin. The quote then traded sideways along with the 1.3042-1.3049 range until the close of the trading day.
Trading plan for Thursday:
In the 30M time frame, the bearish trend goes on despite the price's strange behavior in recent weeks. In the higher time frames, the bearish trend is visible to the naked eye. It has not stopped because the pair has been unable to rise or even retrace up. Therefore, we may expect a weaker pound. On Thursday, the target levels in the 5M time frame are seen at 1.2913, 1.2981-1.2993, 1.3043, 1.3102, and 1.3145. A stop-loss order should be set at the breakeven point as soon as the price passes 20 pips in the right direction after a trade has been opened. Heads of British and American central banks, Governor Bailey and Chairman Powell, will speak on Thursday. No important macro releases are scheduled for the day. However, the speeches of the governors of the two regulators would be enough to trigger market jitters.
