GBP / USD. March 8. The trading system. "Regression Channels". The UK may remain in the EU

4-hour timeframe

Technical details:

The senior linear regression channel: direction - up.

The younger linear regression channel: direction - up.

Moving average (20; smoothed) - down.

CCI: -136.7444

The GBP / USD currency pair resumed the downward movement, failing to overcome the moving average line. Thus, this time, the movement of the pair was logical in terms of the fundamental component. As we have repeatedly noted, there is no compelling reason to strengthen the British currency. Nevertheless, a pound from time to time shows growth based on rumors and expectations. Then, when these rumors and expectations are not met, the pound decline is resumed. New posts on Brexit over the past day were not available to traders. Thus, the last important information remains the ultimatum of the EU to the UK, which is expressed in the fact that over the next 48 hours (less) London must provide a plan to overcome the current stalemate in the negotiations. Such an interpretation causes smiles among traders, since Brussels offers London 48 hours to find a solution that it could not find earlier in several months. Moreover, for some reason, it is London that should search, and not both sides. In general, we still believe that Brussels does not want to let Britain out of the alliance and, perhaps, still hopes that if it is not compliant in the negotiations, the "hard" Brexit option will scare the British parliament and Brexit will not happen at all. We would not exclude such an option, and moreover, it now looks the most likely.

Nearest support levels:

S1 - 1.3062

S2 - 1.3000

S3 - 1.2939

Nearest resistance levels:

R1 - 1.3123

R2 - 1.3184

R3 - 1.3245

Trading recommendations:

The pair GBP / USD resumed its downward movement. Thus, short positions with targets at 1.3062 and 1.3000 are now relevant before the start of a new round of correction, which Heikin Ashi will signal with purple bars.

Buy orders are recommended to open in case the pair manages to gain a foothold above the moving average. In this case, the tendency for the instrument to change again is upward and the long positions with targets at 1.3245 and 1.3306 will become relevant.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The junior linear channel is the purple lines of the unidirectional movement.

CCI is the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

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

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