22.06.202203:00 Forex Analysis & Reviews: Overview of the GBP/USD pair. June 22. Scotland is talking about the independence referendum again.

The GBP/USD currency pair on Tuesday also tried its best to show an upward movement. At this time, the pair has been trading near the moving average line for several days. On the one hand, this is logical, since after the ultra-volatile last week, a period of calm and consolidation should have come. That's what we're seeing right now. But what we are not seeing is a meaningful growth of the British currency. Although, as we have said in previous articles, this week could be a "victory" for the British currency. First, there will be few macroeconomic and fundamental events, so the currency has a good chance of a technical correction. Second, almost the only report on British inflation is likely to show its next acceleration, which will mean an increase in the probability of further growth of the Bank of England rate. Nevertheless, on the first two trading days of the week, the pound is more in one place than it is growing. From our point of view, this only means that the market is still not looking toward buying the British pound. It grew last week thanks to two meetings of central banks, well, that's enough.

The technical picture at the moment is also very unpleasant for the pound. Both linear regression channels on the 4-hour TF are directed downwards, and the price is still very far from its previous local maximum, overcoming which will give at least some chances for an upward trend. On a 24-hour TF, the situation is even worse. The pair is located below the critical line, below the Ichimoku cloud. And to count on serious growth, it is necessary to overcome the Ichimoku cloud, to which the pair needs to go up at least 550 points. If the pound slightly doubled by 400 points after two meetings of the Central Bank, what are the chances of growth by another 550 points in the coming weeks?

Scotland does not want to remain under the jurisdiction of London.

It has been a long time since we talked about the "Northern Ireland Protocol", about the possible withdrawal of Scotland from the Kingdom. However, in recent weeks, both of these topics have again come to the forefront. We have already said that Europe and Britain may break the Brexit agreement in the near future, which will entail, at least, a deterioration in relations and, at most, litigation and a trade war. And yesterday, it became known that Scotland has begun preparations for the second independence referendum in the last 10 years. Scotland's First Minister Nicola Sturgeon has said that the first state document is ready, which will list all the advantages of living outside the UK. According to Sturgeon, recent years have clearly shown that it is simply unprofitable for her country to remain under the rule of Boris Johnson and outside the European Union. "Across Scotland, people are suffering daily from the consequences of the skyrocketing cost of living, low economic growth, lack of public funding, and many other consequences of Brexit, which they did not vote for," Sturgeon said. According to the First Minister of Scotland, the longer the country remains part of the Kingdom, the worse the economic consequences for it will be. Sturgeon believes that the British economic model does not take into account the interests of Scots, who generally voted (for the most part) against Brexit.

As you can see, this topic is getting a new development. At the last parliamentary elections, Sturgeon promised that if her SNP party wins, the referendum will be held before the end of 2023. Her party won, and now it's the middle of 2022. But Edinburgh still needs official permission to hold a referendum, which Boris Johnson (who is not leaving his post for the next 12 months), of course, will never provide in his life. Potentially, we have a new conflict in Europe, which may aggravate the situation, first of all, in the UK. Nicola Sturgeon already hinted last year that a referendum could be held without the consent of London if it does not stop persisting and does not stop ignoring the desire of the whole people.

The average volatility of the GBP/USD pair over the last 5 trading days is 187 points. For the pound/dollar pair, this value is "very high". On Wednesday, June 22, thus, we expect movement inside the channel, limited by the levels of 1.2091 and 1.2463. The reversal of the Heiken Ashi indicator downwards signals a possible new attempt to resume the downward trend.

Nearest support levels:

S1 – 1.2207

S2 – 1.2085

S3 – 1.1963

Nearest resistance levels:

R1 – 1.2329

R2 – 1.2451

R3 – 1.2573

Trading recommendations:

The GBP/USD pair on the 4-hour timeframe has started the daily mode of overcoming the moving average. Thus, at this time, there is a high probability of "swings", so you can trade on the reversals of the Heiken Ashi indicator. Or not to trade at all until the trend movement resumes.

Explanations of the illustrations:

Linear regression channels - help 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.