23.03.202204:24 Forex Analysis & Reviews: Overview of the GBP/USD pair. March 23. Joe Biden goes to Brussels to negotiate the rejection of Russian oil and gas.

The GBP/USD currency pair showed a movement on Tuesday that it did not show last week when two meetings of central banks took place. During the daytime, the pound sterling rose by 150 points although there were no important statistics or other events in the morning or at night. Thus, the Murray level of "8/8" - 1.3184 has been overcome, and the pound sterling can now begin to form a new round of upward correction within the framework of a downward trend. Recall, if you look at the 24-hour TF, it becomes clear: the pair has been in a downward trend for the last 15 months, which itself is a correction against the trend of the ascending 2020. All upward pullbacks and corrections are quite deep, so the pound has fallen against the dollar twice as weak as the euro currency in total over the past 15 months. Thus, a new round of growth to the 35th level will be logical. Yesterday's movement was illogical, which was impossible to predict in advance. Nevertheless, this movement could bring a good profit to the junior TF, since the trend is always good for traders.

In general, the pound remains in the risk zone, as geopolitics puts pressure on all risky currencies and assets. The Ukrainian-Russian conflict is not over and is not even nearing its conclusion. And the UK, together with the European Union, is quite dependent on Russian oil and gas, as well as on Ukrainian grain and other crops. Europe has already announced a food and energy crisis. In the UK, things are better with oil and gas, but it is also dependent on agricultural land in Ukraine. In addition, London is voicing very harsh rhetoric against Russia, clearly not afraid to spoil relations with it completely. This leads to the fact that sanctions are being imposed by both sides at an appalling rate. Boris Johnson supports Ukraine and opposes Russia, but how will such a confrontation affect the British economy, which has promised to abandon Russian oil and gas by the end of the year?

Joe Biden went to Europe to negotiate new pressure on Russia.

The topic of the oil and gas embargo of the EU countries against Russia is the most burning topic at the moment. Recall that for Russia it may end very sadly since about half of all extracted energy resources go to Europe. This will be a major blow to the budget, and where to put the extracted oil and gas, in this case, is completely unclear. Oil wells cannot be paused. They need to be either developed or preserved. However, the European Union cannot abandon hydrocarbons from Russia, as there is simply nothing to replace them with. Hungary has openly stated that it will not support the embargo. Germany doubts the correctness of this approach. Therefore, US President Joe Biden is going to Brussels.

The official reason for the visit is participation in the NATO summit and the meeting of the European Council. During these two events, he will try to persuade European leaders to abandon Russian gas immediately. Some of the gas can be supplied to Europe by the United States itself, but their capacity is not enough to cover 100% of Europe's needs. The issue of the oil embargo will also be discussed. The countries of the Middle East and Venezuela will be called upon to replace Russian oil. Of course, nothing has been decided yet and maybe these issues will be resolved for many months and will not be resolved. Nevertheless, Washington clearly shows its position regarding Russia and its aggression in Ukraine. However, experts are almost sure that the EU's plans to reduce gas from the Russian Federation by 2/3 are doomed to failure, and they will not give up oil at all. The process of redirecting oil and gas flows in the world is too complicated. Already, oil and gas prices are going through the roof. Plus, they are often backed by private companies that do not obey the American president and are guided by the principle of maximum profit, and not by geopolitical factors. Therefore, so far this whole topic is nothing more than conversations.

The average volatility of the GBP/USD pair is currently 114 points per day. For the pound/dollar pair, this value is "average". On Wednesday, March 23, thus, we expect movement inside the channel, limited by the levels of 1.3140 and 1.3368. The reversal of the Heiken Ashi indicator downwards signals a round of downward correction.

Nearest support levels:

S1 – 1.3184

S2 – 1.3123

S3 – 1.3062

Nearest resistance levels:

R1 – 1.3245

R2 – 1.3306

Trading recommendations:

The GBP/USD pair resumed its upward movement on the 4-hour timeframe. Thus, at this time, it is possible to stay in buy orders with targets of 1.3306 and 1.3368 until the Heiken Ashi indicator turns down. It will be possible to consider short positions no earlier than fixing the price below the moving average with targets of 1.3062 and 1.3000.

Explanations to the illustrations:

Linear regression channels - help to determine the current trend. If both are directed in the same direction, then the trend is strong now.

Moving average line (settings 20.0, smoothed) - determines the short-term trend and the direction in which trading should be conducted now.

Murray levels - target levels for movements and corrections.

Volatility levels (red lines) - the likely price channel in which the pair will spend the next day, based on current volatility indicators.

CCI indicator - its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.