The GBPUSD is on the verge of a big move

The GBPUSD pair is relatively volatile and generally does not like to lock itself in narrow ranges, preferring a wide range of fluctuations. Therefore, what is happening now - this is an anomalous situation and indicates that the big movement in the pair is very close.

More than two weeks, the pair is locked in the narrow range of 1.3450-1.3550 (+/-). In fact, this is consolidation at the bottom. That is, the situation when there are no more downward forces to go down, that is, a downward movement has lost potential. But there are not enough reasons for starting the correction. Accordingly, the markets took a wait-and-see attitude. What is characteristic, the last time a similar consolidation in the pair GBPUSD occurred just in the region of 1.3500. That is, this zone is something some sort of rubicon for the pound. Last time its breakdown led to the growth of the pair around 1.4250.

So we think that a big movement is coming. Its possible scale is 400-500 points. The only question is the direction of the movement.

Of course, you can not answer it. To do this, it is enough to set pending orders such as buy-stop above 1.3600 and sell-stop below 1.3450 and just wait the big move.
If you try to predict the direction of the movement, then technically a lot points in favor of correction.

Purely technically powerful divergences on the daily chart (the values of the indicators are growing, but the price remains in the same place) clearly indicate the direction of the future movement - upwards.

Speaking about the fundamental background, we note that the most recent growth of the dollar does not lead to a decrease in the pair GBPUSD. And this, in our opinion, is one of the key moments, since it was the strengthening of the US currency that triggered the pair's decline from 1.4260 to 1.3500. Plus, the growth potential of the dollar is limited - the yield of treasury bonds is at its peak and is unlikely to continue to grow, but this factor was the main driver of the dollar's strengthening recently.

As for the pound, the turn of the fundamental negative, in our opinion, is exhausted. All the bad things that could have happened already happened. Accordingly, any fundamental positive will be perceived extremely optimistically (the market will be pressured by sellers' desire to fix profits at still very attractive prices).

In addition, according to currency strategists from Morgan Stanley pound is one of the most undervalued currencies in the group G10. The level of undervaluation by different estimates ranges from 5% to 10%.

In total, we believe that the GBPUSD pair is preparing for a big move. Its direction is not clear, but technically the correction looks as preferable variant. So, the most impatient can buy a pair already from current prices with relatively small stops (up to 100 points) and very ambitious goals (up to 500 points). More conservative traders, we recommend setting the pending orders for the breakdown, both down and up.