4-hour timeframe
Technical details:
The upper linear regression channel: direction - up.
The lower linear regression channel: direction - down.
Moving average (20; smoothed) - down.
CCI: -79.2988
The GBP/USD currency pair dropped yesterday to Murray's level of "3/8" - 1.3031, but could not overcome it and can now start a round of upward correction. We have repeatedly noted that for the pound sterling, there are two saving levels of support at 1.3031 and 1.3000, from which the price bounced off regularly. Together with the level of 1.3123, they form a side channel, which the pound sterling and the dollar cannot leave. For the pound, today will be more important than for the euro. In the UK, a report on retail sales will be published today, which is quite important. Forecasts, by the way, are very weak. If in annual terms an increase of 4.6% is expected, then on a monthly basis a reduction of 0.3%. Thus, if the forecasts come true, then traders will understand that retail sales have fallen compared to the previous month. But in the States, retail sales, by contrast, can grow. Therefore, already on the basis of these two publications, it is possible to make a forecast about the continuation of the strengthening of the American currency. To counter the growth of the dollar will be the levels of 1.3000 and 1.3031. Meanwhile, the head of the European Parliament, Donald Tusk, believes that the abolition of Brexit will be the best solution for everyone. He also fears that UK participation in the European elections could lead to an increase in the number of Euro-skeptics in the European Parliament, which threatens the further development and existence of the entire European Union.
Nearest support levels:
S1 - 1.3031
S2 - 1.3000
S3 - 1.2970
Nearest resistance levels:
R1 - 1.3062
R2 - 1.3092
R3 - 1.3123
Trading recommendations:
The pair GBP/USD continues to be below the MA, however its potential fall is limited by the levels of 1.3031 and 1.3000, the first of which has already been worked out and has not been overcome. Thus, a further decline is in doubt, unless today's retail sales reports help the bears.
Buy positions will formally become relevant after the pair is fixed above the moving average line with a short target of 1.3123 - this is the upper limit of the side channel.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanations for illustrations:
The upper linear regression channel is the blue lines of the unidirectional movement.
The lower 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.
Heiken Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com
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