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: -80.7595
If the euro fell down immediately after the announcement of the results of the Fed meeting and Powell's speech, then the pound unexpectedly slightly adjusted upwards and only after that began to fall. Because of this small breakthrough, the British currency did not even lose too many positions against the dollar on July 31, but the downward trend for the GBP/USD pair, of course, is preserved. We already said yesterday that, in principle, the Fed meeting for the pound is not an important event. Now, traders are interested only in data on Brexit, which remains about 90 days. What can the new UK government do in 90 days? From our point of view, only the most soundly prepare for the exit from the EU. And the preparation is already in full swing. The head of the Treasury Sajid Javid announced the allocation of an additional 2.1 billion pounds for various needs in preparation for Brexit. Meanwhile, immediately after the speech of Scottish Minister Nicola Sturgeon on the need and preparation for the referendum on independence, a similar statement was made by the leader of the Irish Republican party, Mary Lou McDonald. She said that she did not know how the British government would be able to maintain the unity of the peoples of Northern Ireland and Ireland and prevent the emergence of a rigid border between these States. McDonald also said that Northern Ireland is seeking back to the European Union. Thus, the UK may lose both Scotland and Northern Ireland, which in the referendum of 2016 voted in the majority against leaving the European Union. Well, the pound/dollar pair continues to be in a downward movement, as evidenced by the blue bars of Heiken Ashi.
Nearest support levels:
S1 – 1.2085
Nearest resistance levels:
R1 – 1.2146
R2 – 1.2207
R3 – 1.2268
Trading recommendations:
The GBP/USD pair resumed its downward movement, so now it is still recommended to sell the pound sterling with the target of 1.2085, before the new turn of the Heiken Ashi indicator upwards. The initiative in the market continues to remain in the hands of bears.
It will be possible to buy the pound/dollar pair with the goals of 1.2329 and 1.2390 not earlier than the price consolidation above the moving average line. However, in the coming days, such a development is not expected.
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.
