Review of the GBP / USD pair. June 7. China and the United States are in conflict again. - Get to know Forex

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Review of the GBP / USD pair. June 7. China and the United States are in conflict again.

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4-hour timeframe Technical data: Major linear regression channel: direction – up. The lowest linear regression channel: direction – up. Moving average (20; smoothed) – sideways. CCI: -12.2902 The British pound sterling against the US dollar continues to swing, which has been rolling for more than three weeks. Last Thursday, the pound / dollar pair, like the euro / dollar pair, significantly decreased, but on Friday it recovered almost all the losses of the previous day. Thus, in essence, nothing has changed. It can be seen with the naked eye that the pair is within a very limited price range, so at this time there is no technical reason to expect a change in the general picture of the state of affairs. It is still very difficult for the American currency to rise in price. We have listed the reasons a million times already, and they have not changed lately. There are, of course, some hopes that when central banks begin to scale back their quantitative stimulus programs and raise rates, something will change. But when will it be? Markets, of course, are now grabbing their teeth on the subject of a possible tightening of monetary policy by the Fed, the ECB and the Bank of England. Although the ECB did not give any signals about such a step during the day. However, traders need to rely on something to build long-term strategies. Therefore, inflation indicators, the timing of the possible completion of QE programs, and so on are now being used. Although in fact, all this will happen someday, but not in the near future. Consequently, now these factors have no influence on the overall trend. Such topics and news on these topics can only have a local impact on a particular currency. For example, if tomorrow Andrew Bailey announces that the BA is ready to raise rates by the end of the year, this will, of course, support the British pound. But what will change for the pound / dollar pair in connection with this? It has been growing for 15 months already. Let’s say Jerome Powell openly announces a rate hike (although various polls of Fed officials say that America expects to raise the rate no earlier than 2023), and then what? The dollar will strengthen by 100-150 points, but will the global upward trend end? From our point of view, no. The global factors that continue to influence the American currency are too strong. Therefore, it does not even make sense to expect strong dollar growth before the end of 2021. By the way, traders are now strenuously ignoring many different topics. And they ignore them perfectly logically. To be honest, even the topic of the trade war between the United States and the Middle Kingdom, which began several years ago, had only a background effect on the dollar. After all, the most important thing is macroeconomic indicators. What is the difference in what trade relations are Washington and Beijing? The main thing is how their economies are developing, the gap between their GDP is decreasing or increasing. Another thing is Great Britain, which continues to receive “cuffs” from fate. After Brexit ended, many thought the worst was finally over. However, already at the beginning of 2021, riots began on the island of Ireland, which threaten to erupt with renewed vigor literally at any moment. The “Scottish” question will be dreamed of by Boris Johnson for a long time in nightmares. After all, we all know that if someone really wants to secede, then it is unlikely that someone will give up their idea, if the opposing side is against. There are a lot of examples just for the last 10 years. At least the same Catalonia. Thus, “for” or “against” Boris Johnson regarding the new referendum on independence in Scotland, this is the second question. The first question is the desire of the Scots themselves. Nothing prevents them from holding a referendum and seceding from England. Yes, London does not recognize this branch. Yes, the courts and all kinds of proceedings will begin. Perhaps some Malaysia will refuse to recognize the legitimacy of the referendum. But again, how many such examples have there been in recent years? Many world leaders also refused to recognize Lukashenko as a legitimate president, so what? He still remains in power in Belarus. Economic ties between Belarus and the rest of the world are practically not broken, because money and the economy are much more important than who the president is in the country and how the internal elections were held in it. Thus, Scotland in the next couple of years may present more than one surprise to London. Plus, do not forget that the European Union supports the return of Scotland to its membership. Therefore, he will provide all possible support to Edinburgh and its leader, Nicola Sturgeon. In general, the fundamental background for the British pound remains weak. But it will be able to find its reflection on the charts of currency pairs only when global factors, such as the injection of trillions of dollars into the American economy, cease to act. When the “crisis” factors cease to operate, then they will begin to influence the usual factors to which everyone was accustomed to before the pandemic and the global crisis. But again, this is not a prospect for the next couple of months. From a purely technical point of view, at this time it is not even possible to build a clear side channel to trade from its borders. Moreover, the movement is so “swing-like” that overcoming any channel boundary does not guarantee the beginning of a new trend. Therefore, we recommend at this time to pay more attention to lower timeframes, where trading is still a little more convenient. The average volatility of the GBP / USD pair is currently 93 pips per day. For the pound / dollar pair, this value is “average”. On Monday, June 7, we therefore expect movement within the channel, limited by the levels 1.4064 and 1.4250. The reversal of the Heiken Ashi indicator back downward will signal a new round of the downward movement within the “swing”. Nearest support levels: S1 – 1.4160 S2 – 1.4130 S3 – 1.4099 Nearest resistance levels: R1 – 1.4191 R2 – 1.4221 R3 – 1.4252 Trading recommendations: GBP / USD pair on a 4-hour timeframe started a new round of the upward movement. Thus, today it is recommended to stay in buy orders with targets at 1.4221 and 1.4252 until the Heiken Ashi indicator turns down. Sell ​​orders should be opened if the Heiken Ashi indicator reverses downward with targets at 1.4130 and 1.4099. The pound sterling continues to move flat now. Recommended reading: Review of the EUR / USD pair. June 7. The ECB and Fed will begin to phase out their stimulus programs no earlier than 2022. Trading signals, COT report: Forecast and trading signals for the EUR / USD pair for June 7. Forecast and trading signals for the GBP / USD pair for June 7. – Source: InstaForex

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