GBP/USD. Preview of the new week. Important reports on orders for long-term goods and GDP in the US should influence the

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The British pound, unlike the euro, continues to trade quite strangely. And this "strange" applies to many aspects. For example, on a 24-hour timeframe, the movement is strange, because it is recoilless. The last round of movement to the north began on September 23 and since then there have been a couple of pullbacks down. In total, the pound is getting more expensive. It turns out that for exactly five months and during this time, it has grown by 14 cents. Thus, the British currency is extremely overbought. However, the pound in its movement is more similar to bitcoin. It is also overbought. It has been growing for several months in a row, but at the same time, traders do not worry about such aspects at all and continue to buy the pound for dollars. This week, the pair's quotes have already worked out the psychological level of $ 1.4000. And so far, there is no sign that buyers are ready to lock in some of the profits on long positions. It is also "strange" that the fundamental background cannot even theoretically provide such strong support for the pound. Yes, the same factors play a role for the pound as for the euro currency. That is, for example, the factor of economic decline in the second quarter of 2020. Then, recall, the Americans lost 31%, and the British - about 20%. However, the latest GDP data already suggests that the US recovered most of its losses. The total losses of the British economy compared to the fourth quarter of 2019 are 7.8%, the American - 2.5%. The difference is three times. Thus, it can no longer be said that the pound is growing due to the record fall in US GDP. The United States has already leveled most of the losses. There remains only the "money supply factor", the factor of pouring huge sums into the American economy. However, this factor alone cannot play a role for the markets. We remind you that Britain has a huge number of its own economic and epidemiological problems, as well as Brexit, which ended only a month and a half ago. And these problems were also during the last five months when the pound sterling became more expensive. That is, traders completely ignored the high probability (at that time) of the absence of a trade agreement with the EU, the weak economic recovery, two "lockdowns" this winter, new strains of "coronavirus", which are opened with enviable regularity in the UK. Thus, we continue to believe that the pound sterling shows only "speculative growth". And that says it all. Since the "foundation" and "macroeconomics" do not have any effect on the mood of traders.

Next week, there will be an extremely small amount of macroeconomic statistics in the UK. On Tuesday, the unemployment report and data on applications for unemployment benefits will be published, and this is probably all for the current week. No important speeches are scheduled. In the States, the situation will be a little more interesting. On Thursday, February 25, an important report will be published on orders for long-term goods, as well as on GDP for the fourth quarter in the second estimate. In addition to these reports, a few more minor ones will be published, however, we do not even recommend paying attention to them now, since it is not too likely that even the most important reports will be noticed and worked out by the markets. As we have repeatedly said, 90% of the macroeconomic statistics are still ignored. Thus, given that fundamental and macroeconomic factors do not play a special role now, traders will only have to pay attention to technical factors. This greatly simplifies the process of trading the pound/dollar pair. Moreover, in the last two weeks, the pair stopped moving in the "swing" mode and began the usual upward trend. Therefore, we continue to consider trading for an increase and look for upward trends on lower timeframes.

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Trading recommendations for the GBP/USD pair:

The pound/dollar pair continues to trade near its 2.5-year highs, regularly updating them. The "swing" on the 4-hour timeframe has stopped and now there is fairly strong growth in the pair. Last week, traders tried to start a downward correction, however, it ended very quickly, near the Kijun-sen line. Thus, the markets failed to consolidate the pair below this line, therefore, the upward trend should be continued with the aim of the resistance level of 1.4103.

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

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