GBP/USD. August 20. Trading system "Regression channels". Theresa May will lose support under any Brexit scenario

4-hour timeframe


Technical data:

Higher channel of linear regression: direction - down.

The lower channel of linear regression: direction - down.

Moving average (20; flattened) - sideways.

CCI: -21.2447

On August 17, the GBP/USD currency pair continued its weakest upward correction and failed to work out the moving average line. In the meantime, a member of the ruling Conservative Party, Jacob Rees-Mogg gave an interview about Theresa May's prospect to implement her exit plan at the legislative level. According to Rees-Mogg, if the prime minister realizes the so-called "Chequers" plan, then they will vote against her in the House of Commons. The politician believes that Theresa May should remember the promises she made in the elections and how much they correspond to the "soft" scenario Brexit, which the British prime minister wants to realize. According to Rees-Mogg, the correspondences are small and he noted that it is better to leave the EU without a deal than according to the "Chequers" plan, which will leave the UK without the right to vote in the European Union. Based on opinions, the "hard" Brexit scenario without an agreement will also not satisfy many politicians and experts. This option implies a more serious financial pressure on the UK economy, which is the concern of BOE's head, Mark Carney. Given the fact that the number of votes in the referendum was distributed almost 50% to 50%, then there will be many who are unsatisfied. Also, the idea of holding a new referendum sounded more than once.

Nearest support levels:

S1 - 1.2695

S2 - 1,2573

S3 - 1.2451

Nearest resistance levels:

R1 = 1.2817

R2 = 1.2939

R3 = 1.3062

Trading recommendations:

The GBP/USD pair continued its weak correction. It is not recommended to work out this movement since it is very weak. You can only consider long positions after fixing the price above the removals with targets of 1.2817 and 1.2939 and only small lots.

Sell-positions are recommended to be opened after completion of correction with the targets of 1.2695 and 1.253. The signal for opening short position will be the indicator Heiken Ashi 1-2 bars in blue color or the rebound prices from the moving middle line.

In addition to the technical picture, one should also consider the fundamental data and the time of their release.

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The junior channel is linear-violet lines of unidirectional motion.

CCI - the blue line in the regression window of the indicator.

Moving average (20; smoothed) - the blue line on the price chart.

Levels of Murray - multi-colored horizontal stripes.

Heiken Ashi is an indicator that color bars in blue or purple.

* The presented market analysis is informative and does not constitute a guide to the transaction.

The material has been provided by InstaForex Company -

Intraday technical levels and trading recommendations for EUR/USD for August 20, 2018


Daily Outlook

In April 2018, the EUR/USD pair outlook turned to become bearish when the pair pursued trading below the lower limit of the depicted consolidation range (1.2200).

The price level of 1.1500 offered temporary bullish recovery towards 1.1830. The EUR/USD bulls failed to pursue towards higher bullish targets.

Instead, a descending high was established around 1.1800.

Currently, the EUR/USD pair is testing the price zone of 1.1450-1.1370 (demand zone) where the depicted trend lines are located on the depicted weekly chart.

As anticipated, bearish closure below 1.1400 was achieved. This allowed further bearish decline towards 1.1300.

For further bearish decline to occur, the EUR/USD pair needs obvious bearish breakdown below 1.1375. Initial bearish target would be located around 1.1275 then 1.1120 if enough bearish pressure is applied.

Hence, The EUR/USD short-term outlook remains bearish towards the mentioned levels unless bullish persistence above 1.1420 is achieved.

This would pause the ongoing bearish momentum allowing bullish pullback to take place towards 1.1520 initially.

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NZD/USD Intraday technical levels and trading recommendations for August 20, 2018


Breakdown of 0.7220-0.7170 (neckline zone) was needed for a bearish breakout of the depicted consolidation range (0.7170 and 0.7350).

Quick bearish decline took place towards 0.6700-0.6800 where narrow ranged consolidation range was established.

On July 7, evident bullish rejection pushed the NZD/USD pair above 0.6820 temporarily.

However, lack of bullish momentum made the bulls fail to maintain enough bullish momentum above 0.6700.

On August 9, bearish breakout below the depicted consolidation range (0.6700-0.6840) was executed. This allowed the current bearish decline to occur towards 0.6600-0.6570.

The NZD/USD pair outlook turned to be bearish. Bearish targets are projected towards the price levels of 0.6520 and 0.6480.

Recently, early signs of bullish recovery are being manifested around the recent low around 0.6550. This indicates a possible bullish pullback.

Conservative traders should wait for a deeper bullish pullback towards 0.6700-0.6720 for a low-risk SELL entry. S/L should be placed above 0.6770.

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Technical analysis of USD/CAD for August 20, 2018



The USD/CAD pair continues to trade downwards from the levels of 1.3094. This week, the pair dropped from the level of 1.3169 to the bottom around 1.2974 then set around the spot of 1.3080. Today, the first resistance level is seen at 1.3094 followed by 1.3132, while daily support 1 is seen at 1.2974. According to the previous events, the USD/CAD pair is still moving between the levels of 1.3094 and 1.2974; for that, we expect a range of 120 pips (1.3094 - 1.2974). If the USD/CAD pair fails to break through the minor resistance level of 1.3094 , the market will decline further to 1.3048. This would suggest a bearish market because the RSI indicator is still in a positive area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.2974 with a view to testing the daily major support. However, if a breakout takes place at the resistance level of 1.3132, then this scenario may become invalidated.

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Forecast for GBP/USD as of August 20, 2018


On Thursday and Friday last week, the British pound showed a moderate correction against the background of a general dollar weakening. Before the current price, a significant resistance of the downward trend developed, with about 20 points left. The breakthrough of the significant resistance may trigger a deeper growth to the resistance of the trendline (blue) to the 1.2902 area. Of course, this resistance can be overcome as it happened in the second half of July - this time is indicated in the graph with a gray oval. In this case, the upper trend red line can be worked out.



On the 4-hour chart, the criticality of the moment looks more pronounced. The price has been maintained for a long time by the balance line indicator, the price has been turned down from it three times, but now the price of the asset and both indicator lines have converged at one point. Now, further growth and a downward reversal of the price have the same probability. "Bears" are targeting the range of 1.2548 / 88, formed by the lows of June 21, 2017 and the lows of December 8, 2016.

* The presented market analysis is informative and does not constitute a guide to the transaction.

The material has been provided by InstaForex Company -