4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - upward.
Moving average (20; smoothed) - sideways.
CCI: -10.4497
The British pound also resumed its upward movement against the dollar, probably for the same reasons as the European currency. We have repeatedly said that the reasons for strengthening the British currency are much less than the euro, since there are a huge number of unresolved issues in the UK regarding the country's continued existence and cooperation with the European Union after Brexit. To be more precise, so far everything is going to the point that there will be no cooperation with the EU at all, or it will be worked out "in a hurry". However, the difficult state of the pandemic in the US, as a result of high fears of investors and traders about the economy, make the US dollar continue to fall in price. In the United States, the highest growth rates of COVID-2019 distribution are maintained. Over the past day, 58 thousand new cases of infection were detected. In terms of morbidity and mortality from the virus, the United States leads the world. Anti-records also continue to be updated in some states. In Texas, over the past day, almost 11 thousand cases of the disease were detected, and a total of 275,000 cases were registered, which is more than in Italy or Spain. At the same time, the first stage of testing of one of the vaccines against "coronavirus" was completed in the United States. It is reported that the vaccine has performed well in human trials, but causes a number of side effects, such as headache, chills, fatigue, and muscle pain. The first stage involves testing on healthy people. The second stage will include testing on other categories of people, different age groups. However, we do not consider this news optimistic. Recall that 141 vaccines against COVID-2019 are currently being developed worldwide and none of them has yet passed all types of clinical testing and has not been allowed to mass production. Doctors around the world have repeatedly said that creating a vaccine against a new virus is a very long and time-consuming process.
While there is no interesting information coming from the UK, we suggest focusing again on the problems of America, as they have the greatest impact on the foreign exchange market, allowing the British pound and the euro to become more expensive in recent months. We have already discussed the pandemic and its possible consequences for the American economy. However, an important question is how the United States are going to get out of the second "wave" of the epidemic, how are they going to protect themselves against a possible third "wave" and most importantly - what course will the country follow after November? After all, it is no secret that the presidential election will be held in November, and if Trump loses, he will leave office in January 2021. The main candidate for President in 2020, Joe Biden, offers a fairly extensive plan to create new jobs in the country, which will not be superfluous, given how many people lost their jobs during the crisis. Biden proposes to allocate $ 2 trillion to fight climate change and significantly reduce carbon emissions from power plants. Biden's plan also includes upgrading the country's infrastructure, aimed at increasing the number of electric vehicles and improving the energy efficiency of buildings. "There is no more important challenge that we must meet in the next decade than the coming climate crisis. If left unaddressed, it will become a real threat to the health of our planet and our very survival," the Democratic candidate said. In addition, Biden promises to solve many socially important issues. For example, achieving racial justice, increased attention to scientists, and a return to true democracy, which, according to Biden, "completely destroyed Trump". The Republican candidate, Trump, has already criticized Biden's plan, saying that he "will kill the US energy complex". At the same time, Trump showed that he does not care about climate issues, as well as about democracy. Trump's main promise is a rapid and complete recovery of the US economy.And there are much more controversial points than it seems at first glance. We have already understood that Trump will seek to restore the country's economy, but with what sacrifices? According to the country's chief epidemiologist Anthony Fauci, the US authorities rushed to cancel the "lockdown", as a result, they received a second "wave" of the epidemic. And the epidemic will not allow the American economy to recover at the pace that Trump needs. However, this does not matter, since the economy will not have time to recover in any case in the three months remaining before the elections. Trump needs voters to believe in his plan. However, it is being criticized more and more often, and not without reason. To some extent, quarantine measures in the US continue to operate in 27 states, which, of course, greatly hinders Trump's intentions. State governors in the United States have every right to decide on their own issues with the quarantine, the President can not order them to "open" the state. The US leader has been criticized for being too focused on his own re-election, rather than on the security of Americans. Although the Americans themselves pay their President in the same coin. Almost 90% of the black population of the United States does not approve of Trump's actions as President. About 70% of Latinos oppose Trump's re-election. Several states that were considered "Republican" are ready to vote for Joe Biden. Several "wavering" states that brought victory to Trump in 2016 are not ready for his re-election. So far, everything suggests that Trump will not be re-elected, and the US recovery course will be as democratic as possible.
Yesterday in the UK, the consumer price index for June was published, which, however, did not cause any reaction from traders. The value of inflation was 0.6% y/y, which in any case is very small, although experts' forecasts were exceeded. Today, the average wage and unemployment rate for May are scheduled to be published in Britain. However, we believe that traders will continue to ignore the statistics and continue to pay more attention to the overall fundamental background. From a technical point of view, the quotes of the pound/dollar pair returned to the exit area of the moving average line, so the upward trend is resumed. Both linear regression channels are directed upwards.
The average volatility of the GBP/USD pair continues to remain stable and is currently 86 points per day. For the pound/dollar pair, this value is "average". On Thursday, July 16, thus, we expect movement within the channel, limited by the levels of 1,2503 and 1,2675. A reversal of the Heiken Ashi indicator downwards will indicate a downward movement, and the pair may re-establish itself below the moving average.
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 on the 4-hour timeframe after an unsuccessful attempt to overcome the Murray level of "7/8" can start a new round of downward movement and go below the moving average. Thus, buy orders with the goals of 1.2695 and 1.2756 are still valid, however, we recommend opening buy positions only if the pair is fixed above the previous lows (1.2669). It is recommended to resume selling the pair after fixing the quotes below the moving average with the first goal of 1.2512.
