Overview of the GBP/USD pair. April 7. Boris Johnson is hospitalized. The British ignore the quarantine requirements and

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: -52.2255

On Monday, April 6, the British pound was fixed below the moving average line, which indicated a desire to start forming a new downward trend. However, trading on Monday showed that the bears are not so eager and want to resume selling the British currency and buying the US dollar. Volatility continues to decline gradually, indicating calm market participants. However, with the advent of reassurance, the movement trend begins to leave the currency market. The pound/dollar pair spent the entire past week in a relatively narrow price range, which can not be called anything other than flat. The new week also started with an inarticulate movement. Thus, in the current situation, we believe that we need to wait for some time for developments. The pair should "detach" from the moving average and start a new trend. Alternatively, you should now trade on lower timeframes.

No important macroeconomic statistics were published on Monday. The UK and US calendars remained empty. They will be so on Tuesday, April 7. Thus, even if traders wanted to work out statistics, they simply would have nothing to work out. However, there were certain messages that deserve attention on Monday. The country's Prime Minister, Boris Johnson, was hospitalized because for several days he had a stable high temperature, which could not be brought down by anything. Recall that earlier Johnson was infected with "coronavirus" and in accordance with the rules of quarantine, self-isolated in his residence at Downing Street. In the morning, it was announced that the Prime Minister was sent to the hospital for a routine check-up, but later it became known that Johnson remains in the hospital for the night. It was also later reported that a meeting of the COBRA emergency committee to counter the "coronavirus" was held by Foreign Minister Dominic Raab, Johnson's deputy for the latter's illness. According to the latest and unconfirmed information, Boris Johnson will be connected to a ventilator.

At the same time, many media outlets note the complete insubordination of the British to the rules of quarantine. The country has already recorded about 50,000 cases of the disease, as well as 5,000 deaths from the epidemic. However, a large number of British citizens, especially in large cities, do not stay at home in quarantine, but regularly go out on the streets, not at all out of special necessity. For example, on Saturday, about 3,000 people visited Brockwell Park in London alone. People walk along the Thames embankment, relax, have fun, drink beer. According to journalists, almost no one wears masks, and no one observes the distance of two meters. The police are not able to cope with all the violators. And, to be honest, the fines for violating the quarantine are not so big, especially for the British, only about 60 pounds. In fairness, it should be noted that the rules of quarantine are not as strict as they could be. And for this leniency, the government of Boris Johnson has previously been criticized. In particular, the British are allowed to go out once a day to play sports. However, as noted by the British media, every citizen interprets this permission in their own way. Someone walks around the city, thinking that this is a sport. Someone is playing soccer with children in the playground. In general, it is not the majority of British citizens who are in self-isolation. Plus, it is impossible to check exactly what time a particular citizen is on the street on a particular day. Moreover, there are no restrictions on the time of this "one exit to the street per day". Thus, any Briton can legally leave the house for a walk at 8 am and go home at 10 PM, without violating any of the rules of quarantine. In the worst case, he will have to pay a "whole" 60 pounds fine. In Scotland, there was a humorous situation. The head of the Ministry of Health of Scotland, Catherine Calderwood, urged all citizens not to go out unless absolutely necessary, after which she twice left Edinburgh for her country home, located about an hour away. The media took a photo of Calderwood outside her city apartment, after which the head of the Ministry of Health came under a barrage of criticism and later resigned. "I didn't follow the advice I gave to others, I'm really sorry. What I did was wrong. I am very sorry," Ms. Calderwood said.

Meanwhile, Queen Elizabeth II of Great Britain was evacuated from London to Windsor. It recorded the Queen's fifth address to the British population in the 68 years of her reign. The Queen urged British citizens to unite in the fight against "coronavirus" and expressed the hope that years later everyone can be proud of how we responded to this challenge. However, requests are requests, and the health sector the UK is experiencing serious problems with a lack of space in hospitals and a lack of necessary drugs to treat the virus. Personal protective equipment for doctors is also running out, and some hospitals use masks with an expiration date that expired in 2012. All doctors are begging British citizens not to leave their homes... According to medical experts, the UK has not yet passed the "peak" of the epidemic and can reach Italian levels in terms of mortality and morbidity. Government representatives have already warned citizens that in the event of a sharp increase in the number of people infected with the "Chinese virus", the health system may not be able to withstand the pressure. There aren't enough medicines or hospital beds for everyone. Therefore, there is an assumption that the system will simply not cope with 100,000 infected people... Perhaps now is the best time to tighten quarantine measures and increase penalties for non-compliance?

From a technical point of view, the pound/dollar pair is now squeezed between the Murray levels of "2/8" and "3/8". The pair has bounced from the first one only once, and from the second – three times already. Thus, we have formed a side channel. It is logical to assume that the exit of the pair's quotes from this channel will mark the resumption of the trend movement. Thus, we believe that the best solution now is to wait for the exit of the channel or trade between the upper and lower borders of this channel.

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The average volatility of the GBP/USD pair continues to decline and is already 157 points. However, the activity of traders on the pound/dollar pair still remains quite high, which should be taken into account when opening any positions. On Tuesday, April 7, we expect movement within the channel, limited by the levels of 1.2149 and 1.2463. The flat has resumed at this time and is still limited by the Murray levels of "2/8" and "3/8", which are almost identical to the volatility levels.

Nearest support levels:

S1 - 1.2207

S2 - 1.1963

S3 - 1.1719

Nearest resistance levels:

R1 - 1.2451

R2 - 1.2695

R3 - 1.2939

Trading recommendations:

On the 4-hour timeframe, the GBP/USD pair has passed to side movement. Thus, it is now recommended to trade between the upper and lower border of the side channel. It is recommended to buy pound with the target of 1.2695 after fixing the price above the level of 1.2451. It is recommended to open new sell positions if the bears overcome the moving average and the level of 1.2207 with the first target level of 1.1963.

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