4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – up.
The moving average (20; smoothed) – down.
CCI: -154.9833
On Tuesday, May 14, the British pound continues the downward movement. Trump's statement yesterday about threats to introduce new duties to China and demands to sign a trade agreement in the near future, rather than wait for the 2020 election, helped him in this. The dollar has previously responded favorably to the escalation of the trade conflict with China. Now, the factors that support the dollar paired with the pound are much more than the opposite. In the meantime, it became known that the two ruling parties of Great Britain, the Conservatives and the Labor Party, once again sat down at the negotiating table, trying to find a way out of the EU, which would find support in Parliament. However, most likely, we are talking only about the revision of the version of the agreement of Theresa May, as the EU agrees only to this option of "deal" and is not going to conduct new negotiations on this issue. Laborites are even ready to vote for the "deal" in Parliament, if after that it will be put to a popular vote, then to the second referendum. However, Theresa May is fundamentally against the second referendum, and even the question arises, why? Because the referendum may end with the rejection of Brexit, and this will mean a complete political collapse of Theresa May. Thus, both parties are very far from consensus.
Nearest support levels:
S1 – 1.2939
S2 – 1.2909
S3 – 1.2878
Nearest resistance levels:
R1 – 1.2970
R2 – 1.3000
R3 – 1.3031
Trading recommendations:
The GBP/USD pair has overcome the moving average and continues to move down. Thus, short positions with the targets at 1.2939 and 1.2878 are relevant now, before the reversal of the Heiken Ashi indicator to the top.
Buy-positions are recommended to be considered only after the pair is reversed above the moving average with the first targets at 1.3062 and 1.3092. In this case, the bulls will get a new chance to form an upward trend.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of illustrations:
The upper linear regression channel – blue lines of the unidirectional movement.
The lower linear regression channel – purple lines of the unidirectional movement.
CCI – 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.
Heiken Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com