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4-hour timeframe
Technical details:
The upper linear regression channel: direction - sideways.
The lower linear regression channel: direction - down.
The moving average (20; smoothed) - up.
CCI: 120.0805
On Friday, May 3, the British pound strongly strengthened against the US currency. This is a very illogical reaction of the market to what is happening. We do not even mention that most of the US reports on Friday were definitely positive. Accordingly, it would be much more logical to see the strengthening of the US dollar. Moreover, it became known that in the local elections in the UK, Theresa May's party lost control of 49 out of 248 local councils and about 1,300 deputies. There was an immediate scandal within the party when one of its members asked why Theresa may have not yet resigned. Finance Minister John McDonell accused Theresa May of disclosing confidential information regarding negotiations on the "deal" about Brexit between Labor and the Conservatives. We have already written that such negotiations, as well as Theresa May's desire to push through her version of the Brexit agreement through Parliament by any means, can cause a loss of votes among her own party members who are not supported by any variations of the Customs Union with the EU. But this option is supported by the Labor Party, and it seems that Theresa May intends to give up on this issue. Against the background of all these events, the strengthening of the British pound looks absurd.
Nearest support levels:
S1 - 1.3123
S2 - 1.3062
S3 - 1.3000
Nearest resistance levels:
R1 - 1.3184
R2 - 1.3245
R3 - 1.3306
Trading recommendations:
The pair GBP/USD has begun a round of correction against strong growth on Friday. Thus, it is now recommended to wait for the completion of this round of correction and resume trading for a raise with the targets at 1.3184 and 1.3245. The technical picture implies just such an option. But from a fundamental point of view, the resumption of the downward trend in the pair will be much more logical.
Sell positions are recommended to be considered after fixing the pair below the moving with the first targets at 1.3000 and 1.2939.
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.
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