Overview of the GBP/USD pair. May 4. Great Britain came third in the world in the number of deaths from the "coronavirus."

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 37.3988

The British pound finished last week with a correction. However, the overall picture is very similar to that of the euro/dollar pair (although it has started to adjust). The pound also worked out the previous local maximum during the upward movement, which it failed to overcome and now the "double top" pattern suggests the end of the upward trend. As a confirmation of this hypothesis, we recommend waiting for the price to fix below the moving average line. But in order to start trading on the downside, you need to overcome the moving average in any case. On the other hand, the consolidation of quotes above the Murray level of "7/8"-1.2634 will provoke further strengthening of the British currency. No important macroeconomic statistics are scheduled for the first trading day of the week in the UK and the United States.

At a time when the European Union is beginning to relax quarantine measures, the UK has reached fourth place in the world in the number of infections with "coronavirus". According to the latest data, Britain has overtaken France and Germany – 183,500 diseases. In addition, the country is in third place in the world in terms of the number of deaths from COVID-2019 – almost 29,000. Behind them were Spain, France, and Germany, where the epidemic started earlier. However, the UK also does not want to lag behind countries that remain in the European Union and plan to begin easing quarantine measures from May 26. The government is expected to present a plan for a gradual easing of the quarantine on May 7. However, the date of lifting the restrictions may be revised if the situation with the epidemic in the country does not change (that is, it does not get better). Representatives of the UK health sector believe that the "peak" of the epidemic has passed, so from May 26, residents can be allowed to leave their homes without an emergency, as well as shops, cinemas, etc. Schools are planned to open a little later, in June. However, if rallies are held in the States in favor of the quickest possible end of quarantine, people want to return to work and their usual life, then in Britain people have developed the so-called "coronophobia". More than 60% of citizens are afraid of mass gatherings of people and public transport. Thus, experts say that business and economic activity in the UK may recover at a slower pace than in other countries. The British government also fears that the easing of quarantine measures at the end of May may be too early, which could cause a new wave of pandemics and create a new powerful burden on the health system. Thus, the date of the country's exit from quarantine also wants to be linked to a decrease in the number of patients in medical institutions in case a new outbreak follows, so that the health sector will be able to cope with the wave of newly infected people.

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The average volatility of the GBP/USD pair has increased again due to the last trading day and now stands at 128 points. For the pound, this is not too much, the main thing is not to start a new trend of increasing volatility, which may mean a new panic in the market. On Monday, May 4, we expect movement within the channel, limited by the levels of 1.2365 and 1.2621. A reversal of the Heiken Ashi indicator upward will indicate the completion of the round of corrective movement.

Nearest support levels:

S1 – 1.2451

S2 – 1.2390

S3 – 1.2329

Nearest resistance levels:

R1 – 1.2512

R2 – 1.2573

R3 – 1.2621

Trading recommendations:

The GBP/USD pair started to adjust on the 4-hour timeframe. Thus, traders are recommended to buy the pound again with the goals of 1.2573 and 1.2621, if the Heiken Ashi indicator turns upward or the pair bounces off the moving average line. It is recommended to sell the pound/dollar pair not before fixing the price below the moving average with the first goal of the Murray level of "3/8"-1.2390.

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

Possible variants of the price movement:

Red and green arrows.

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