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Overview of the GBP/USD pair. June 29. Preview of the week.

4-hour timeframe


Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - downward.

CCI: -113.6468

The British pound, paired with the US dollar, declined this week's first trading day. Thus, the pound/dollar pair continues to be located below the moving average line, which maintains a downward trend. Therefore, in the near future, the US dollar may continue to rise in price. It should be noted that the technical pictures of both main pairs are very similar. In the case of the pound/dollar, a new round of corrective movement within the framework of an upward trend, which has been lasting for 1.5 years, is also very likely in the global plan. Thus, the pound/dollar pair may also continue to move down to its previous local minimum. In fundamental terms, everything is also very similar to the situation around the euro/dollar pair. By and large, at this time, the factors that affect both pairs are the same. However, we remind you that the current strengthening of the US currency may be temporary as upward trends persist. And, for example, for the pound, the price updated its three-year highs a few weeks ago. Therefore, despite the strengthening of the dollar in the last couple of weeks, we consider its prospects very vague. However, it is in the pound/dollar pair that the US currency may become more expensive in the near future. And it's all about the "coronavirus" again.

The fact is that in the last month, the situation with the epidemic and the health sector has been escalating in the UK again. The number of people infected with the "coronavirus" is growing, and in recent days, it has been 15-20 thousand infections daily. In addition, Health Minister Matt Hancock resigned after he violated the rules of social distancing, and several cases of a new "lambda strain" were also discovered in the country, about which there is not much information yet. It is not known for sure how existing vaccines resist it. As we can see, Boris Johnson was right when he extended the quarantine restrictions until July 19. Although the country has one of the highest vaccination rates globally and in a month, 80% of the adult population can receive both vaccinations. As we see, it is the UK that is suffering from a pandemic again. Of course, it does not make sense to talk about the third "wave" yet. However, a little more than a year ago, 5-10 thousand diseases per day were already considered very large numbers. Unfortunately, such news does not add optimism to the bulls. After all, each new outbreak of the epidemic will create unknown risks for the economy. At the same time, we are talking about almost any country in the world. Roughly speaking, it is just as unprofitable for the British economy that there should be a new wave of the epidemic in the States and themselves. In the modern world, all economies are closely connected, and the supply chains of goods can be very long. Accordingly, epidemiological problems in some countries can negatively affect the economy of other countries. In addition, any aggravation of the situation with the "coronavirus" is a potential extension of quarantine restrictions or the introduction of new ones.

Consequently, the central bank will have to support its economy for longer. Consequently, the economy itself will take longer to recover. Therefore, this is very bad news for the British pound, which may create additional pressure on the British currency. In addition, a few weeks ago, Boris Johnson's former chief adviser Dominic Cummings spoke in the UK, who revealed a lot of unpleasant stories from the British Parliament, especially in the first months of the pandemic. Everyone got it, including the already former health minister Matt Hancock. At the same time, the World Health Organization said that despite the appearance of vaccines and the availability of medicines against the "coronavirus," this does not mean that the virus will disappear. Humanity will now have to learn to live with this virus, which will also learn to live with humanity, the WHO says. In other words, the COVID virus will continue to mutate, giving rise to new strains, and new foci of infection will break out in the world from time to time. Also, the "coronavirus" can acquire a seasonal character complementing the usual flu. In general, the news is not too funny.

As for the prospects of the British pound, it has indeed declined in recent weeks in pair with the dollar. However, it still seems that this segment of the trend is exclusively corrective and that when it ends, the global upward trend will be quickly resumed. However, in any case, first, you need the pair to fall to the level of 1.3665 and see how it will behave. Recall that both pairs may fall to their previous local lows, and we expect a possible completion of the corrective movement. Accordingly, the pound/dollar pair can go south for about 250 points from the current positions. And if it reaches those levels at all, it will be there that you can count on an upward turn and the resumption of the upward trend. In any case, just as in the case of the euro/dollar, we have a moving average line on the 4-hour timeframe. Thus, we should trade from it. As for macroeconomic statistics and fundamental events, there will be almost nothing to pay attention to in the UK this week. Only on Thursday will the GDP value for the first quarter be published in the final assessment, which is unlikely to interest the markets. On Thursday, there will be two speeches at once by the chairman of the Bank of England, Andrew Bailey, who also does not shine with eloquence recently. Consequently, data from the States on the labor market state will also be of the most significant importance for the British pound.


The average volatility of the GBP/USD pair is currently 82 points per day. For the pound/dollar pair, this value is "average." On Tuesday, June 29, we expect movement inside the channel, limited by the levels of 1.3796 and 1.3962. A reversal of the Heiken Ashi indicator back to the top will signal a possible new round of corrective movement.

Nearest support levels:

S1 – 1.3855

S2 – 1.3794

S3 – 1.3733

Nearest resistance levels:

R1 – 1.3916

R2 – 1.3977

R3 – 1.4038

Trading recommendations:

The GBP/USD pair has fixed back below the moving average on the 4-hour timeframe and may continue its downward movement. Thus, today it is recommended to stay in sell orders with targets of 1.3855 and 1.3796 until the Heiken Ashi indicator turns up. Buy orders should be opened if the price is fixed above the moving average, with targets of 1.3962 and 1.4038.

The material has been provided by InstaForex Company -