4-hour timeframe
Technical data:
The upper channel of linear regression: direction - upward.
The lower channel of linear regression: direction - upward.
The moving average (20; smoothed) - up.
CCI: 66.8930
The GBP/USD currency pair continues to trade inside the side channel, limited to the levels of 1.2970 and 1.2780. At the moment, the quotes are trading above the moving average line, which gives grounds to assume the continuation of a restrained upward movement to the upper line of the side channel. At the same time, the flat (namely, we are dealing with it right now) can turn the pair down at any time. We still have no way to complete the period in which traders are almost unresponsive to fundamental events and just waiting for December 12, when the elections to the UK Parliament will take place. Macroeconomic statistics are now fully passed by traders, and no new information on the topic of Brexit is available for obvious reasons. Based on this, we can only wait for December 12 and watch the struggle for power between the Conservatives and the Labor Party, which is already taking a very serious turn. We will remind that earlier the results of very large studies, which predicted a major victory for the conservatives, were at the disposal of traders. But there were also reports that the Labor Party was closing the gap on the Conservatives, and in coalition with the Social Democrats, they could once again be able to block Brexit and other initiatives by Boris Johnson. This weekend, in London, there was a terrorist attack on the London Bridge, which killed several people. As it turned out later, the deceased, accused of the attack - Usman Khan, was released early from prison. Despite this unfortunate event on London Bridge, the British Prime Minister did not miss the opportunity to cast a shadow on the main rival party - the Labor Party, accusing it of the fact that such a scenario was possible because of amendments to the legislation adopted by the Labor Party, which was in power from 1997 to 2010. It is a pity that even such a situation is used by political forces to accuse each other and try to lower political ratings in the run-up to the elections.
Today, December 2, the UK will also publish the index of business activity in the manufacturing sector. According to experts, its value did not change in November and will be 48.3. By the way, it's not the weakest value if you look at all EU countries (and the UK because of the not implemented Brexit still belongs to the EU), however, it still indicates a decline in production. Thus, the fundamental background is still on the side of the US currency, and traders still do not pay any attention to it. Thus, it does not even matter what the value of the business activity index will be today. You should wait for the moment when the quotes of the pound/dollar pair leave the side channel. When traders will start working on fundamental data again. When they start to pay attention to the failed macroeconomic statistics from the UK again. Until all of the above, the sluggish movement within the lateral range will persist. And all market participants are well aware that trading inside the "sideways", when the pair does not react to the news, is extremely uncomfortable.
Nearest support levels:
S1 - 1.2909
S2 - 1.2878
S3 - 1.2848
Nearest resistance levels:
R1 - 1.2939
R2 - 1.2970
R3 - 1.3000
Trading recommendations:
The GBP/USD currency pair continues to trade sideways. Formally, the upward trend is maintained, since not only the price is above the moving average line, but both channels of linear regression are directed upwards. However, the area of 1.2970-1.3010 remains unsettled, so we do not expect the formation of a new upward trend. It is possible to trade inside the side channel. For example, from the level of 1.2970, a rebound is possible and a reversal of the Heiken Ashi indicator downwards can signal a round of downward movement. Buying the pound in the upper area of the side channel is not the most appropriate exercise.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustrations:
The upper channel of linear regression - the blue line of the unidirectional movement.
The lower channel of linear regression - the purple line of the unidirectional movement.
CCI - the blue line in the regression window of the indicator.
The moving average (20; smoothed) - the blue line on the price chart.
Support and resistance - the red horizontal lines.
Heiken Ashi - an indicator that colors bars in blue or purple.
Possible variants of the price movement:
Red and green arrows.
