Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - downward.
Moving average (20; smoothed) - downward.
The British pound also continued its downward movement during the fourth trading day of the week, but much more modest than the euro currency. However, the most important thing is that the pound/dollar pair is again fixed below the moving average line, therefore, the trend is now again downward. The last bars of the Heiken Ashi indicator is colored blue, so in the very short term, the downward movement is also maintained. However, we also draw the attention of traders to the fact that yesterday's news from overseas was ignored. If in the case of the European currency, the dollar continued to rise in price, then in pair with the pound - no. First, this is called decorrelation, and second, there is reason to assume that the dollar in pair with the euro grew not because of good statistics on orders for durable goods. In general, we stand by our opinion. There are no reasons for the growth of the British currency at this time. However, the market cannot stand still and just wait for these very reasons to appear. Large players who do not set their goal to get exchange rate differences, and do not wait for any specific moments to make major transactions for the sale or purchase of a particular currency. Therefore, the market moves even when there is no news. Thus, our assumption that the pound should continue to fall does not mean that the pair will go to price parity right now. However, the bias in the long term remains downward. We still recommend trading strictly on the trend.
At this time, the verbal confrontation between Donald Trump and his former national security adviser John Bolton continues in the United States. In an interview with CNN, John Bolton said that Trump is not coping with the crisis caused by the "coronavirus" epidemic. "I have no confidence in how President Trump is handling this colossal crisis," Bolton said. Also, the former adviser to the President said that Trump made too big a bet on the trade deal with China and did not want to pay attention to the warnings of advisers about the danger of the "coronavirus" and its possible consequences from the very beginning. "He didn't want to hear bad news about the virus hiding in China or its potential impact on the trade deal he wanted to make. He didn't want to hear about the potential impact of the pandemic on the American economy and its impact on his re-election," Bolton concluded. The former White House resident also said that Trump is more concerned about his re-election and campaigning than running the country and thinking in the national interest.
By the way, according to most experts and political scientists, Donald Trump is doing well only with the economy. On all other issues, his level of support is lower than that of Joe Biden. And this is although Biden continues to remain completely in the shadows. Trump is actively traveling around the country, giving interviews left and right, and does not let you forget about yourself for a second. Joe Biden can not hear any sound. However, sooner or later, "sleepy Joe", as Trump called him, will still have to be included in the election race. His ratings are already high and it even seems that Biden does not need to do anything at all, Trump himself has already done everything for him.
Meanwhile, the entire process of Brexit negotiations between Brussels and London is firmly stuck in a puddle. The parties cannot come to any compromise. Previously, Johnson was regularly criticized by Michel Barnier. Yesterday, the President of the European Parliament, David Sassoli, said that the British Prime Minister did not want to compromise for an agreement during the last EU summit. Mr. Sassoli expressed doubt that Boris Johnson wants to agree at all. "Together we are very concerned because we do not see much enthusiasm from the British authorities and we do not see a strong desire to reach an agreement that satisfies all parties," the President of the European Parliament said. Thus, the time is slowly approaching July - the month until the end of which Boris Johnson "saw no obstacles to the conclusion of an agreement", and London and Brussels are in the same place as they were in March.
Now, in general, there is a situation for the pound/dollar pair, when it is completely unclear what long-term prospects a particular currency has. On the one hand, there are a huge number of problems in the United States, from the "coronavirus" to the political crisis named after Donald Trump. On the other hand, the UK is full of economic problems, as well as a high probability that there will be no deal with the European Union at all, which threatens to cause new financial problems. However, the pair cannot stand still until the balance between currencies is disturbed or new factors appear that can affect the mood of market participants. Therefore, there will still be movements and in the current conditions, we recommend trading following technical analysis.
There are no macroeconomic reports scheduled for the last trading day of the week in the UK. However, during the entire current week, there were no such statistics. Thus, we do not expect strong movements tomorrow. At the same time, traders now do not need fundamental factors to conduct active trading. Therefore, the pair can safely trade actively and without macroeconomic data. So far, the technical picture is in favor of continuing the downward movement. The lower linear regression channel turned down. In the hourly time frame, the price broke above the rising trend line. In the most short-term plan, we can only wait for the overcoming of the support area of 1.2403-1.2423 and the further movement down another 200 points is unlikely to be prevented by anything. In any case, as long as the pair is trading below the moving average, it is the downward mood that persists.
The average volatility of the pound/dollar pair continues to remain stable and is currently 112 points per day. For the pound/dollar pair, this indicator is "high". On Friday, June 26, thus, we expect movement within the channel, limited by the levels of 1.2299 and 1.2523. Turning the Heiken Ashi indicator upward will indicate a new round of corrective movement.
Nearest support levels:
S1 – 1.2390
S2 – 1.2329
S3 – 1.2268
Nearest resistance levels:
R1 – 1.2451
R2 – 1.2512
R3 – 1.2573
The pound/dollar pair turned down on the 4-hour timeframe and settled below the moving average. Thus, today it is recommended to sell the pound/dollar pair with the goals of 1.2329 and 1.2299 and keep the shorts open until the Heiken Ashi indicator turns up. it is recommended to buy the pound/dollar pair after the reverse consolidation of quotes above the moving average with the first goals of 1.2523 and 1.2573.
*Účelem zde zveřejněné analýzy trhu je zvýšení vašeho povědomí, nikoli dávání pokynů k obchodování.
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