4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - upward.
Moving average (20; smoothed) - upward.
CCI: 132.6552
The British pound continues to break all records of its value and is close to updating its three-year highs. Just a little more and the British currency will approach the levels that were before the 2016 referendum. The most interesting thing is that there is no merit of the pound itself in this. The British economy is currently much more worrying than the European or American ones, and the problems of the "coronavirus" in the UK have always been much more pronounced than in any other EU country. And yet, the pound continues to rise in price. Slowly, if you look at the long-term plan. On the 24-hour timeframe, the upward movement occurs at a very low rate, so it can not be said that the pound is growing like bitcoin. Nevertheless, there are practically no serious corrections and pullbacks in the same long-term plan. Thus, the buyers of the pound sterling continue to ignore the entire fundamental background from the UK. Well, the reasons for the growth of the pound sterling lie in the US dollar. It is the reason that the demand in the international currency market continues to decline, which leads to the growth of competitors. It is illogical growth. But what can you do if the dollar continues to weaken due to the pumping of money into the US economy by Congress and the Fed? Thus, at first glance, the Eurozone and Britain have more problems now. In winter, they introduced a new "lockdown", the economy is likely to finish in the red for the fourth quarter of 2020 and 2021 first. But "global fundamental factors" are more important for traders now. It is due to them that the fall of the US currency continues.
In other fundamental topics, there is not even much sense to understand now. For example, Andrew Bailey and Jerome Powell were scheduled to perform yesterday. But markets have long been familiar with the views of the heads of the Bank of England and the Fed on the prospects for their economies and monetary policies. From Andrew Bailey, everyone was waiting for statements regarding the reduction of the key rate in the negative area in the coming months. They didn't wait. From Jerome Powell, many naively expected statements about the curtailment of the quantitative stimulus program. They didn't wait. The heads of central banks have nothing more to tell new market participants.
"Coronavirus" problems are also not in the first place among traders now. It seems that even the Americans themselves have already forgotten about the epidemiological situation in the United States. Even though every day the country continues to record 100 thousand or more new cases of the disease. However, over the past few weeks, this figure has still decreased from 300 thousand. In the UK, the situation has also become much easier in recent weeks. The vaccination process is in full swing, but the country's government, represented by Boris Johnson, urges the population not to relax, and the third "lockdown" continues to operate. Moreover, the number of cases of infection in Britain is falling, but with the end of the quarantine, it may creep up again. The government understands this and tries to avoid such a scenario by all means. For example, London has decided to tighten the rules for arrivals from abroad. Now, people arriving from abroad will have to stay in quarantine (some in special quarantine hotels) and take at least two tests for "coronavirus" during the isolation period. The tests will be taken on the second and eighth days of quarantine. The penalty for not passing the test is 1000 pounds. Anyone who tries to hide a recent visit to countries on the "blacklist" faces a prison sentence of up to 10 years. Such tightening is also associated with the fact that in recent months, the emergence of new strains of "coronavirus" has been noted around the world. In particular, in the UK itself, a new strain was discovered a few months ago, which is 50-70% more contagious than the usual COVID. South Africa, Brazil, and some other countries also reported new mutations. However, the UK also stood out among these countries, as the second new strain of infection was recently discovered in it. British scientists said recently that they have already recorded 76 cases of infection with the virus, which has mutated in two directions. The cases were identified in Bristol and Liverpool. Most of the concerns are caused by the so-called "Bristol strain", which, according to unconfirmed information, can be much more contagious than all known strains, and can also successfully resist vaccines. So far, this is a concern since no relevant studies have been conducted yet.
Also, it became known that the most well-known and popular vaccines against the "coronavirus" of Pfizer and AstraZeneca show in reality a much lower percentage of positive results than in clinical trials. Now we are talking about 60-70% of successful vaccinations, after which patients begin to develop their antibodies against the virus. Thus, 30-40% of those vaccinated may require repeated administration of the vaccine. Moreover, it is still unknown exactly how the new strains - "Brazilian", "South African" and two "British" - will interact with existing vaccines. It is these strains that are causing the greatest concern among scientists.
Well, the pound/dollar pair, despite all this sad news, continues its upward movement. We still recommend paying special attention to technical factors. In recent days, the "swing" seems to have stopped, but it is still too early to draw definite conclusions on this issue. So far, the pound continues to grow, but there is still nothing stopping it from going 150-200 points down tomorrow.
The average volatility of the GBP/USD pair is currently 81 points per day. For the pound/dollar pair, this value is "average". On Thursday, February 11, thus, we expect movement within the channel, limited by the levels of 1.3767 and 1.3929. The reversal of the Heiken Ashi indicator downwards signals the beginning of a corrective movement against the upward trend.
Nearest support levels:
S1 – 1.3794
S2 – 1.3733
S3 – 1.3672
Nearest resistance levels:
R1 – 1.3855
R2 – 1.3916
R3 – 1.3977
Trading recommendations:
The GBP/USD pair on the 4-hour timeframe is in a new round of upward movement. Thus, today it is recommended to keep open long positions with targets of 1.3916 and 1.3929 until the Heiken Ashi indicator turns down. It is recommended to consider sell orders with a target of 1.3672 if the price is fixed below the moving average line.
The material has been provided by InstaForex Company - www.instaforex.com