Overview of the GBP/USD pair. July 22. Trump is again going to use the services of security forces to suppress rallies in

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 209.9669

While the European currency is trading fairly calmly (if you do not take into account last night), the British pound continues to "tear and throw". Over the past two trading days, the pound has grown by at least 200 points. And this is despite the fact that no over-positive fundamental or macro-economic background has been received from the UK these days. There is no news on Brexit, no news on the state of the UK economy, no news on the "coronavirus". The only thing that can be noted and really happy for Britain is the breakthrough in the development of a vaccine against COVID-2019 by Oxford scientists. According to the latest data, thanks to the new vaccine, patients develop an immune response, in other words, the body produces antibodies that are able to fight the "coronavirus". However, it is also reported that the end of the development of the vaccine is still very far away, since now it is only waiting for the third round of testing, in which the vaccine will be tested on people at risk (the elderly, employees of medical institutions). It is reported that such a test requires thousands of test subjects, and it can last several months, since it must take a long time to understand how the vaccine acts on a not completely healthy body and what consequences it can cause. It should also be recalled that there are at least 150 vaccines currently under development around the world. That is, not only the UK is involved in the development and has certain positive results. However, the rise of the British currency in recent days could still be caused by the success of scientists at the University of Oxford.

While the UK is actively working on the development of a vaccine, in the US, rallies and protests continue, caused by the murder of a black man, George Floyd, by a white police officer. And President Donald Trump has returned to the idea of bringing in special units to stop mass riots, which are not. The leader of the American nation intended to send additional units of federal law enforcement officers to those cities where the unrest continues. In particular, we are talking about such giants as New York and Chicago, where the local government is either purposely inactive, or simply afraid to further provoke rebellious Americans. Donald Trump says that the security forces sent to Portland on his orders "did a fantastic job", but local officials say that the intervention of security forces only makes the situation in the city worse. Leaders of several states (probably Democrats) accused Trump of deliberately resorting to the services of intelligence agencies for political purposes before the election.

At the same time, the odious leader of the United States almost openly declared that he would try to resist the will of the American people with all his strength if he lost the presidential election in November. A Fox News reporter asked Trump if he is ready to accept any election result in November? To which Trump responded: "I must see them first. No, I'm not just going to say yes. I'm not going to say no." Thus, there is almost no doubt that Biden will be ahead of Trump in the vote, and Trump will try to challenge the results, accusing the Democrats of fraud in his usual manner and trying to act in other not quite honest ways. The US leader also warned the American population that if Biden is elected, the country will be waiting for "destruction". Trump recalled Portland in the context of this issue. "They (the Democrats) will destroy our country. Unimaginable horrors will happen to America. Look at Portland, where politicians do not mind that they have 50 days of anarchy (mass rallies and protests against the background of a racist scandal), although we sent them help (security forces)," Trump said. By the way, the state and city are really run by Democrats (the Governor of Oregon is a Democrat, the mayor of Portland is a Democrat, the state attorney is a Democrat). However, under American law, peaceful protests and rallies are allowed. Accordingly, attempts to disperse demonstrators with the help of security forces are indeed a violation of the Constitution.

Well, while Trump continues to dream of dispersing demonstrators, his political ratings continue to deteriorate rapidly. We have repeatedly noted that by November the situation may change dramatically several times, but at the moment everything looks as if Trump will lose, and half of America is acting against him now. According to the US electoral system, the population of each state does not vote for a particular candidate. Each state, according to the "winner takes all" principle, gives a certain number of "electoral votes" to a particular candidate. The number of "electoral votes" in each state is different and is determined according to the number of residents in the state. In total, 538 "electoral votes" are obtained throughout the country. Thus, if in any state, the winner is Trump, then he gets all the "electoral votes" of that state, and does not divide them with the loser. Thus, more Americans can support one candidate, but another can win if he wins in the states with the largest number of "electoral votes". So, the latest opinion polls indicate that Trump is beginning to lose support in the native Republican states, as well as in the states most "controversial" (or "wavering").

Also, Donald Trump decided to resume holding daily briefings on the "coronavirus". "I think this is a great way to get information to the public," Trump said. It is believed that Trump stopped holding briefings after journalists started asking him a lot of uncomfortable questions that "revealed" a lot of unreliable and outright false statements by the head of the White House and his administration. And of course everyone remembers the story about treatment with ultraviolet light and disinfectants.

Based on this, the upward trend for the GBP/USD pair may continue to form, but after two days of strengthening the pound, a downward correction is also necessary. Previous local highs were overcome, so the bulls showed their intention to continue buying the British currency. On the third trading day of the week, no important macroeconomic publications or other events are scheduled again. However, as we can see, news on the topic of the "coronavirus epidemic" from Britain or the US can have an impact on the foreign exchange market.

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The average volatility of the GBP/USD pair continues to remain stable and is currently 109 points per day. For the pound/dollar pair, this value is "high". On Wednesday, July 22, thus, we expect movement within the channel, limited by the levels of 1.2657 and 1.2875. Turning the Heiken Ashi indicator downward will indicate a downward movement. All Murray levels will be recalculated today.

Nearest support levels:

S1 – 1.2726

S2 – 1.2695

S3 – 1.2665

Nearest resistance levels:

R1 – 1.2756

Trading recommendations:

The GBP/USD pair also resumed its upward movement on the 4-hour timeframe. Thus, the flat was canceled, and buyers returned to the market. Thus, it is recommended to trade for an increase with the goal of 1.2875 (the level of volatility) before the Heiken Ashi indicator turns down. Short positions can be considered after fixing the price below the moving average with the goals of 1.2573 and 1.2543.

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