4-hour timeframe
Technical details:
Higher linear regression channel: direction - downward.
Lower linear regression channel: direction - downward.
Moving average (20; smoothed) - sideways.
CCI: -1.4194
The British pound paired with the US dollar starts Wednesday, April 8, above the moving average line. However, we believe that the pound/dollar pair is now inside the side channel, limited by the Murray levels of "4/8"-1.2207 and "6/8"-1.2451. Thus, today the pound may be moving towards the upper limit of this channel, i.e. to the level of 1.2451. During the last trading day, no important macroeconomic reports were published. In fact, all the news still concerns the spread of "coronavirus" in the UK, non-compliance with quarantine measures by the British, as well as the condition of Prime Minister Boris Johnson, who has been in intensive care since yesterday. Interestingly, Downing Street denies the serious condition of Boris Johnson, but it also does not deny that the Prime Minister is hospitalized due to a deterioration in his health. However, officials say Johnson does not have pneumonia. It is also reported that even with mild symptoms of "coronavirus", the patient is prescribed bed rest. Boris Johnson, during his ten-day self-isolation, worked constantly and even participated in a video conference. Now British doctors will work on the recovery of the head of the country, and their American colleagues have been personally delegated by Donald Trump to help them. It is also reported that American doctors have new innovative methods of fighting the "coronavirus". Meanwhile, Boris Johnson's Deputy for the duration of his illness, Dominic Raab, said that the Prime Minister does not need artificial ventilation, and he was not diagnosed with pneumonia. According to the British Foreign Secretary, Boris Johnson's condition was stable this night, and the Prime Minister himself remains in a good mood. "He is receiving standard oxygen treatment and is breathing without any other help," Raab said. This information was confirmed by a member of the government, Michael Gove: "Boris Johnson is not on a ventilator. He continues to stay in the intensive care unit only to receive the necessary help at any time, if it is required." We can only hope that the head of the Kingdom will be all right and that the help of American doctors will not be needed.
On April 8, no important macroeconomic publications are planned again. Not in Britain or the US. Thus, the pound/dollar pair has no reason to leave the side channel today. However, we remind traders that the markets have not fully recovered from the panic and it may return at any moment. For example, the euro was trading much more volatile during the first trading day of the week than in the last two days of last week. The pound also remains fairly active, which may be enough to break out of the side channel at any time.
The average volatility of the GBP/USD pair continues to decline and is already 155 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 Wednesday, April 8, we expect movement within the channel, limited by the levels of 1.2199 and 1.2509. However, the flat resumed and is limited by the Murray levels of "4/8"-1.2207 and "6/8"-1.2451, between which trading can take place today.
Nearest support levels:
S1 - 1.2329
S2 - 1.2207
S3 - 1.2085
Nearest resistance levels:
R1 - 1.2451
R2 - 1.2573
R3 - 1.2695
Trading recommendations:
The GBP/USD pair on the 4-hour timeframe is located inside the side channel. Thus, it is now recommended to trade between the upper and lower border of this channel, that is, between the levels of 12207 and 1.2451. Buy the pound with the goal of 1.2573 is recommended 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 goal being the level of 1.2085.
The material has been provided by InstaForex Company - www.instaforex.com