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

4-hour timeframe

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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 - www.instaforex.com