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Review of the GBP / USD pair. Jan. 7. The paradoxical US dollar continues to trade by its own rules. “Coronavirus” anti-records



DATE OF PUBLICATION: 2021-01-07 03: 08: 274-hour timeframe Technical data: Major linear regression channel: direction – upward; Younger linear regression channel: direction – upward Moving average (20; smoothed) – sideways CCI: -12.1970 The British pound sterling against the US currency began another round of decline in trading on Wednesday, January 6. However, the “next fall” so far looks absolutely standard. It was after such turns of the downward movement that the pound / dollar pair later resumed the upward trend and renewed 2.5-year highs. Thus, for now, do not make premature conclusions that the uptrend is over. We have been expecting its completion for several months now, simply because there are no fundamental reasons for the continued growth of the pound. Moreover, it is the pound sterling that now looks like the weakest of the major currencies, a currency whose issuing country is experiencing serious economic problems. Even despite reaching an agreement on Brexit. The mode in which the pound sterling is traded is still the most similar to the “high volatility swing”. Thus, now the pair can easily go down points 200-250, and then resume the upward trend. Meanwhile, the third “wave” of the pandemic is gaining momentum in the UK. On January 5, another “coronavirus” anti-record was updated, and about 61,000 Britons were infected that day. The fact that the country has already introduced the third lockdown has not yet had any effect on the number of cases of the disease. The UK is now far ahead of countries such as France, Italy, Spain, Russia and others in terms of the number of new cases per day. Thus, it is the UK that is again suffering from the pandemic most severely among European countries. Recall that during the first “wave” it was in Britain that the largest number of deaths from the “coronavirus” was recorded, as well as one of the highest values ​​of the number of infections. As you can see, in the second and third “waves” the situation does not change much, although the government had to draw conclusions. However, despite the fact that Boris Johnson is not afraid to introduce a new lockdown, so far he cannot be praised for the fight against COVID-2019. This means that dissatisfaction with his government will grow among the British. However, neither these problems, nor economic ones exert any pressure on the pound sterling. Even the fact that the British economy will contract in the fourth quarter of 2020 and the first in 2021 does not frighten buyers of the British currency. In the meantime, it can be assumed that the strengthening of the US dollar on Wednesday had reasons related to the United States. Let’s try to figure it out. Macroeconomic statistics from overseas (which everyone has long ignored, but still) was not in favor of the American currency (it will be discussed in more detail in our forecast articles). What else happened in the US, that the euro and the pound fell simultaneously over the past day? Only news that the Democrats can win in the state of Georgia and thus form a majority in the Senate. But since when has the dollar shown growth on the news about the strengthening of the Democrats’ positions in the government? Let’s remind that the last 2 months the Democrats have been doing nothing but resting on their laurels after the won elections. All this time, the American currency has been declining despite everything. And then suddenly it turns out that the Democrats can form a majority in the Senate and control the entire Congress and the White House and the dollar began to grow? Absurd. Thus, we believe that the pound and the euro on Wednesday fell corny for technical reasons. A banal rollback in order to buy more at a better rate. The upward trend continues and nothing can be done about it. Meanwhile, Britain, so much like America in recent years, has begun vaccinating the population against COVID-2019. It is reported that around 1.3 million people have been vaccinated across the country. It is also reported that more than half of this number was due to vaccinations of people over 80 years old. This is good news, but when it came in, the pound started to fall. Thus, the positive news about the “coronavirus” and the fight against it has nothing to do with it. It should also be noted that most of the world’s media continue to insist that Brexit will leave an indelible mark on Britain. We already wrote about Scotland and its possible exit from the EU yesterday. However, the issue of the island of Ireland, on which there are two friendly powers, but one now belongs to the United Kingdom, and the other to the European Union, is becoming more and more acute. Recall that a “hard” border between Ireland and Northern Ireland will not appear, nevertheless, when crossing the Irish Sea, many goods will be subject to customs checks. There will certainly be certain difficulties when crossing the border of the European Union with Great Britain. Simply put, the Northern Ireland border. Thus, many experts expect a serious deterioration in the mood in Foggy Albion. So far, only Wales has shown no concern. From a technical point of view, the uptrend persists and is signaled by both linear regression channels. Also, the pair cannot go far below the moving average line yet. Thus, even the consolidation of quotations below the moving-away does not guarantee a strong decline, although we expect it within the framework of the “high-volatility swing”. Nevertheless, the movements in the pound now defy logic and analysis, so you need to be ready for absolutely any scenario. It may be better to use lower timeframes in trading now and try to filter out weak signals, trade only by strong ones. The average volatility of the GBP / USD pair is currently 120 pips a day. For the GBP / USD pair, this value is “high”. On Thursday, January 7, we therefore expect movement within the channel, limited by the levels of 1.3484 and 1.3724. An upward reversal of the Heiken Ashi indicator will signal a new round of upward movement within the “swing”. Nearest support levels: S1 – 1.3550S2 – 1.3489S3 – 1.3428 Nearest resistance levels: R1 – 1.3611R2 – 1.3672R3 – 1.3733 Recommendations: The GBP / USD pair on the 4-hour timeframe is now in a new round of the downward movement. Thus, today it is recommended to open new long positions with targets at 1.3672 and 1.3724 if the price bounces off the moving average or the Heiken Ashi indicator turns upwards. It is recommended to trade the pair down again with targets at 1.3489 and 1.3428 if the price consolidates below the level of 1.3550. In general, the “swing” continues for the pair. Recommended reading: Review of the EUR / USD pair. Jan. 7. Trump’s Last Battle: What Legacy Will the Current US President Leave to the Republicans? Trading Signals, COT Report: Forecast and Trading Signals for EUR / USD for November 7 Forecast and Trading Signals for GBP / USD for November 7 Material provided by InstaForex – www .instaforex.comSource – InstaForex

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