4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – down.
The moving average (20; smoothed) – down.
CCI: -12.7227
The strengthening of the pound at the end of last week was due solely to the desire of traders to close some short trades. That is, the beginning correction is purely technical in nature, and the growth of the pound is not associated with the desire of traders to start buying the British currency. Fundamental data coming from Britain continue to be negative. The country is preparing for the election of a new leader of the Conservative party and the Prime Minister. There are already more than 10 candidates for these positions. It is impossible to assume now who will become the new Prime Minister. For a long time, Boris Johnson was considered the main candidate, but after he received a subpoena for a lawsuit on the deliberate misrepresentation of the population in the referendum in 2016, his political position was shaken. Political Britain was faced with an interesting phenomenon. In the elections to the European Parliament, the Brexit Party won, which has no members in the British Parliament. If new parliamentary elections are held, the number of Conservatives and Labor among the government can be significantly reduced. Thus, both parties do not benefit from parliamentary elections. On this basis, the option of a new referendum is becoming more and more realistic. The fate of the pound remains in the hands of bears. The foreign exchange market still sees no reason to buy the pound. The price rebound from the moving average may trigger a resumption of the downward trend.
Nearest support levels:
S1 – 1.2573
S2 – 1.2512
S3 – 1.2451
Nearest resistance levels:
R1 – 1.2634
R2 – 1.2695
R3 – 1.2756
Trading recommendations:
The GBP/USD pair began to adjust. Thus, now it is recommended to wait for the price rebound from the moving and sell the pound again with the targets of 1.2573 and 1.2512, as the market mood remains "bearish".
It is recommended to consider long positions only after a pair is fixed above the moving with targets at 1.2695 and 1.2756, but only in extremely small lots, as the trend remains frankly downward.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of illustrations:
The upper linear regression channel – the blue line of the unidirectional movement.
The lower linear regression channel – the purple line of the unidirectional movement.
CCI – the blue line in the indicator regression window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels – multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.
