Main Quotes Calendar Forum
flag

FX.co ★ Overview of the GBP/USD pair. June 9. The European Union threatens to respond powerfully and harshly to any violation of the Brexit treaty.

parent
Forex Analysis:::2021-06-09T02:13:29

Overview of the GBP/USD pair. June 9. The European Union threatens to respond powerfully and harshly to any violation of the Brexit treaty.

4-hour timeframe

Overview of the GBP/USD pair. June 9. The European Union threatens to respond powerfully and harshly to any violation of the Brexit treaty.

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: -30.6048

The British pound paired with the US dollar continues to be in the "swing" mode for more than three weeks. In principle, we can start each article like this since nothing changes for the pound/dollar pair. During the past day, the volatility decreased again, and the price did not even try to break out of the side channel of 1.4100-1.4220. Thus, what can we say about the GBP/USD pair dynamics now, if it just stands in one place? If there is at least some downward bias in the euro, then there is nothing like that in the pound. If the euro is even trying to adjust a little, the pound is not even trying. All the fundamental background from the UK continues to be ignored. The Fed continues to pour hundreds of billions of dollars into the US economy, keeping the dollar rate as low as possible. Even the "speculative" factor has already started to fade away, as the latest COT report showed that professional traders in the reporting week were busy opening short positions. But this is still not enough for the pound to fall at least a little. Therefore, the pound/dollar pair stays inside the side channel, not far from its 3-year highs.

Meanwhile, some "difficulties of understanding" have again emerged between the UK and the EU. Recall that after Brexit was completed at the end of last year, there were already several controversial situations and moments that threatened London and Brussels with legal proceedings and the emergence of an open conflict. First, Brussels accused London of non-compliance with the "Northern Ireland protocol," then London accused the European Union of dishonest and unfair treatment of all its partners. It was followed by an escalation of the "fish question" because it turned out that not all European vessels have access to British waters. France has already openly stated that it sees no point in discussing any new agreements with Britain if it cannot adhere to the current ones. Recall that London needs a deal on the services sector to gain access to the European financial market. And now the deputy head of the European Commission, Maros Sefcovic, once again declares that the UK does not comply with the terms of the protocol on the Northern Ireland border, which may entail a tough response from Brussels. "If the United Kingdom takes further unilateral action in the coming weeks, the EU will not hesitate to respond quickly, firmly and decisively to ensure that the terms of the agreement are respected within the framework of international law," Sefcovic said. "The patience of the European Union is running out, and if this continues, we will have to consider all the tools available to us," he added, alluding to the trial. Recall that the essence of this conflict is that London has already violated several points of the "Northern Ireland protocol" several times this year. However, an agreement is an agreement. The European Union does not believe that the "Northern Ireland protocol" does not work well and needs to be revised, and does not want London to adjust the agreement alone and under the guise. A member of the British government, David Frost, who led the negotiations on a trade deal with Michel Barnier last year, openly stated that this document was ineffective and should be revised. In his view, this protocol, which involves a series of customs and sanitary checks for goods delivered from the UK to Northern Ireland, creates problems in the region and can provoke the outbreak of a long-standing conflict between Protestants and Catholics, Unionists and separatists, which was barely extinguished in 1998 by the Belfast Agreement or the Good Friday Agreement. One of the latest acts of self-will on London was the unilateral extension of the grace period, which allows avoiding sanitary and customs checks for several animal products and plant products that British industrialists send to Ulster, from April 1 to October 1.

In addition, it is reported that US President Joe Biden is going to put pressure on Prime Minister Boris Johnson, demanding full compliance with all the terms of the Brexit agreement. Recall that Joe Biden has Irish roots and is very respectful of Ireland and Northern Ireland. Thus, he is concerned about the fate of these countries. Moreover, he does not maintain a friendship with Boris Johnson, so he does not have any oral agreements and gentlemen's agreements with the head of the British government. London, which last year openly criticized the Chinese authorities for passing laws against Hong Kong that go against the agreement with the United Kingdom and the independent status of the city for 50 years, until 2048, in practice, is not averse to violating one or another point of the international agreement. The British pound continues to ignore all this news stubbornly. I wonder how long it will take for traders to ignore all this negativity from the Foggy Albion? Perhaps until the moment when the Fed and the US Treasury stop pouring hundreds of billions and trillions of dollars into the US economy?

Overview of the GBP/USD pair. June 9. The European Union threatens to respond powerfully and harshly to any violation of the Brexit treaty.

The average volatility of the GBP/USD pair is currently 91 points per day. For the pound/dollar pair, this value is "average." On Wednesday, June 9, we expect movement within the channel, limited by the levels of 1.4056 and 1.4238. The reversal of the Heiken Ashi indicator back up signals a new round of upward movement within the "swing."

Nearest support levels:

S1 – 1.4130

S2 – 1.4099

S3 – 1.4069

Nearest resistance levels:

R1 – 1.4160

R2 – 1.4191

R3 – 1.4221

Trading recommendations:

The GBP/USD pair has started a new round of downward movement on the 4-hour timeframe. Thus, today it is recommended to stay in the sell orders with a target of 1.4099 until the Heiken Ashi indicator turns up. Buy orders should be opened in the event of a reversal of the Heiken Ashi indicator upward with the targets of 1.4191 and 1.4221. The pound is now continuing to move in an absolute flat.

Analyst InstaForex
Share this article:
parent
loader...
all-was_read__icon
You have watched all the best publications
presently.
We are already looking for something interesting for you...
all-was_read__star
Recently published:
loader...
More recent publications...