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At a time when the number of new cases of coronavirus infection is growing rapidly in the United Kingdom, the government is taking a step towards completely lifting stringent restrictive measures.
British Prime Minister Boris Johnson announced on Monday that he intends to lift the restrictions from July 19.
Here's what will change according to the roadmap:
Following the points above, everything looks good enough, but business is still concerned that the COVID situation may worsen and new problems will arise, restrictions that the government is silent about at the moment.
UK Health Minister Sajid Javid warned that new coronavirus cases could rise to 100,000 a day over the summer as the country prepares to loosen rules on July 19. At the moment, Britain is already at levels in January with 27,000 new cases of infection, which was only about 2,000 at the beginning of May.
Time will tell what all this will lead to, but what can be said for sure is that right now, a speculative race awaits us.
What is happening in the market in terms of technical analysis?
The pound sterling has been weakening since the beginning of June, losing about 3.5% of its value. The downward movement is quite large, but at the scale of the medium-term trend, the exchange rate of the British currency is still high.
For price changes since the beginning of July, there is a slight correction from the pivot variable 1.3730. As you can see from the daily chart, the 1.3730 variable pivot point coincides with the support area from the beginning of spring, thus, the technical questions, how and why the pullback occurred, disappear. The reduction in the volume of short positions was expected, now the main question is how the quotes will behave further.
In this situation, it is worth focusing on speculative interest, depending on the flow of information, as well as the points of price retention.
In simple terms, if the business continues to panic and the quotes go below 1.3670, then the downward development will continue towards 1.3300. At the same time, if the information noise stimulates the success of Boris Johnson in the fight against the consequences of the coronavirus, then we may fall into a medium-term trap in the form of a large side channel at 1.3700/1.4250.
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