4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – down.
The moving average (20; smoothed) – sideways.
CCI: 50.2209
The British pound also began to adjust against the US dollar. However, if in the case of the euro currency, we are talking about a fairly strong upward movement and commensurate correction, then the pound continues to upset traders with its low volatility. Traders are frankly afraid to buy the pound in the medium term, as there are still no fundamental reasons for such transactions. Therefore, we believe that the British currency can at any time resume the downward trend and update the annual lows. The market is still waiting for the election of the British Prime Minister. Even Brexit has now faded into the background, as long as the new leader of the country is elected, this procedure will not budge. Now, there is a lot of talk about what policy the new Prime Minister will adhere to, but this is only talking, as it is unclear who will become the new Prime Minister. According to the general opinion, Boris Johnson has more chances to win, who is openly supported by Donald Trump and who adheres to the idea of getting out of the EU as quickly as possible, even if this exit is disordered. But before Johnson is elected a new prime minister, it may take another month or two, since the elections, which will be held in several rounds, are not a quick matter. Thus, the pound sterling will continue to be in limbo, as the whole Brexit procedure, for at least 1-2 months. All this time, the pound will still be prone to fall. As we all see, even after a week of failed statistics from overseas, the pound did not rise too much against the US currency. Bears are ready to activate at any time.
Nearest support levels:
S1 – 1.2665
S2 – 1.2634
S3 – 1.2604
Nearest resistance levels:
R1 – 1.2695
R2 – 1.2726
R3 – 1.2756
Trading recommendations:
The GBP/USD pair started a downward correction, which in the next few days may grow into a new downward trend. Technically, there are actually buying of the pound in small lots with the targets at 1.2726 and 1.2756 if the pair rebounds from the MA.
Short positions are recommended to be considered after the pound/dollar pair is fixed below the moving average line with the targets at 1.2604 and 1.2573. In this case, the bears will again take over the initiative on the currency market for GBP/USD.
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.
