12.10.202002:16 Forex Analysis & Reviews: Overview of the GBP/USD pair. October 12. Boris Johnson is as critical as Donald Trump. The pound is kept afloat only by the weakness of the dollar.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - sideways.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - upward.

CCI: 212.1212

The British pound ended the last trading week also with an increase. We remain of the same opinion: the situation in the UK remains much more dangerous and negative than in the US. However, it is still the British currency that continues to strengthen, despite the whole pile of economic problems in the Kingdom. Based on this, we conclude that the British currency is too overbought at this time. Therefore, sooner or later, its decline will resume. It seems that traders are currently working out the negative from the US and the UK in turn. At this time, the negative fundamental background from across the ocean is being worked out again, after which it will be the turn of the background from the Foggy Albion. And since the fundamental background is generally ambiguous, it means that more attention should be paid to technical factors. Technical factors at this time continue to indicate an upward trend, but not too strong and confident. Bears have tried several times in recent days to gain a foothold below the moving average line, so buyers do not have a clear advantage.

In the next article on the euro/dollar, we said that if the government of a democratic country is constantly criticized, then this government is not suitable. This is the case with Donald Trump, and it is also the case with Boris Johnson. It is noteworthy that the heads of the United States and Britain are even a little similar to each other: appearance, manner of doing business, and governing the country. Also, "friends" both denied the high risk of COVID-2019 and both got sick with "coronavirus" as a result. The United States is in first place in the world by the number of cases and deaths from the "Chinese plague". Britain is first in Europe in the number of deaths. In general, the parallels can be drawn indefinitely. Boris Johnson in the last six months, as well as Trump, has been mercilessly criticized. At the same time, he is criticized by everyone except his fellow party members, over whom he simply has power, but who also has power over him. Scotland, Wales, and Northern Ireland are not happy with Brexit, as residents of these countries mostly voted to remain in the EU. Scotland is not happy that London does not allow it to hold a second independence referendum. Northern Ireland still does not understand what will be the regime on the border with Ireland, and what problems should be prepared for in 2021, because on paper everything looks great, but in real life, there may be problems. Also, the whole world criticized Boris Johnson for the bill "on the internal market of the UK", which simply violates the Brexit agreements reached with the EU at the end of last year. Naturally, the Prime Minister is also criticized by the Labor Party, as the direct and largest opposition force. And all this criticism is not far-fetched. The situation with the British economy is so depressing that it makes even those who voted to leave the EU in 2016 worry about the country's future. We have repeatedly made calculations and arguments in favor of the fact that in 2021 the situation for the UK will worsen in any case. And the "coronavirus" only continues to finish off the British economy. And in this situation, the British government needs to do everything to save this very economy. Instead, Johnson and his Cabinet show complete passivity and inability to organize order within Britain, as well as negotiate with international partners. So for now, the UK is just going with the flow. Downstream in the direction of the cliff, where it will inevitably collapse. And what will remain of the British economy after this fall is difficult to say at this time.

Thus, the appearance of rumors that the Conservative Party may replace Boris Johnson with Rishi Sunak is quite justified. As the saying goes, "there is no smoke without fire". As a summary of our reasoning in this article and the EUR/USD article, we would like to ask the question, have you seen such a huge amount of criticism, for example, against Angela Merkel? Or Emmanuel Macron? Or Ursula von der Leyen? The answer to this question shows how strong politicians and managers are Trump and Johnson. And we believe that, especially in the current reality, the exchange rates of the US dollar and the pound sterling directly depend on their heads of state and their policies.

The apotheosis of Donald Trump's illness was his recovery approximately on the seventh day. The President's doctor, Sean Conley, said on October 11 that Trump is no longer contagious. So, at a time when the whole world is gripped by an epidemic and more than 1 million people have already died from complications caused by the virus, Donald Trump, a 74-year-old man with a fair amount of weight, recovers in a week. And he did not spend this week in the hospital. Recall the chronology of events: on October 2, it became known that Trump was infected. October 3 – hospitalized. October 4 – drove around the hospital in a car and waved to his fans. October 5 – released from the hospital and without a mask. October 7 – Sean Conley announced that the president is developing antibodies against the "coronavirus". On October 10, he held the first pre-election rally after "recovery". On October 11, Sean Conley said that Trump is no longer contagious. In general, we can only envy the health of Trump. If everyone in the world carried the virus as well, then there really would be "nothing to fear". By the way, Trump did not do any testing on October 11. In other words, the President has no officially confirmed negative test results. There is only a statement from his doctor that Trump is no longer transmitting the infection. In general, there are serious doubts that Trump was infected with COVID-2019 at all. According to the latest information, the second round of the debate, scheduled earlier for October 15, was canceled, as Trump refused to hold it remotely. This leaves only the third round, scheduled for October 22.

The average volatility of the GBP/USD pair is currently 95 points per day. For the pound/dollar pair, this value is "average". On Monday, October 12, therefore, we expect movement inside the channel, limited by the levels of 1.2939 and 1.3129. A new reversal of the Heiken Ashi indicator downwards signals a new round of downward correction.

Nearest support levels:

S1 – 1.3000

S2 – 1.2939

S3 – 1.2878

Nearest resistance levels:

R1 – 1.3062

R2 – 1.3123

R3 – 1.3184

Trading recommendations:

The GBP/USD pair resumed its upward movement on the 4-hour timeframe. Thus, today it is recommended to stay in long positions with targets of 1.3062 and 1.3123 as long as the Heiken Ashi indicator is directed upwards. It is recommended to trade the pair down with targets of 1.2878 and 1.2817 if the price returns to the area below the moving average line.