GBP / USD. November 8th. The trading system. "Regression Channels". Market optimism on Brexit may begin to subside

4-hour timeframe

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Technical details:

The senior linear regression channel: direction - up.

The younger linear regression channel: direction - down.

Moving average (20; smoothed) - up.

CCI: 94.2018

The currency pair GBP / USD on Thursday, November 8, started the minimum correction and dropped to Murray's level of "7/8" - 1.3123. The pair cannot decline further, as the upward mood remains on the market. This is especially true of the pound sterling. In recent weeks, the market has been filled with optimism about signing an agreement on Brexit, and this is what keeps pushing the pair up, despite the fact that the "deal" is still not signed, the UK has been in a political crisis for a long time, and all the country's macroeconomic indicators leave much to be desired . But we have already written that in any case, one of the currencies (in our case, the dollar) cannot constantly go up. We need at least technical corrections. Therefore, despite the rather strong growth of the British currency in recent weeks, we believe that the trend for the pair remains downward. And mainly from a fundamental point of view. In the meantime, the Luxembourg court will urgently consider a case on the interpretation of certain articles of the Lisbon Treaty. The main question concerns whether a country that has expressed a desire to leave the European Union can refuse this decision unilaterally. The Lisbon Treaty says nothing about this. The case was initiated by a Scottish court and politicians who were initially against Brexit. From our point of view, this is another possible sticking point that will prevent Theresa May from completing the British exit from the EU.

Nearest support levels:

S1 - 1.3123

S2 - 1.3062

S3 - 1.3000

Nearest resistance levels:

R1 - 1.3184

R2 - 1.3245

R3 - 1.3306

Trading recommendations:

The currency pair GBP / USD has begun to be adjusted, as indicated by the indicator Heikin Ashi. Thus, to open new long positions with the target of 1.3184, you should wait until the current correction completes.

Sell positions can be opened no earlier than fixing the price below the moving average line. Only in this case, we can expect a decrease in the pair.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The junior linear channel is the purple lines of the unidirectional movement.

CCI is the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

Heikin Ashi is an indicator that colors bars in blue or purple.

The material has been provided by InstaForex Company - www.instaforex.com