21.05.201912:27 Forex Analysis & Reviews: Overview of GBP/USD on May 21. The forecast for the "Regression Channels". The collapse of the pound will continue this week

4-hour timeframe

Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – down.

CCI: -110.1798

The pound spent the first trading day of the week in absolute calm, and the bulls did not have enough strength even to start the correction against the background of a complete lack of macroeconomic events. Thus, the conclusion suggests itself, there are currently no bulls in the Forex market for the pair GBP/USD. Unfortunately, there are no new data on the topic of Brexit now either. Theresa May announced a "new and bold" proposal to Parliament, however it is unknown when it will be announced. It is only known that a new vote on the "deal" should take place in early June, that is, in two weeks. Meanwhile, the pound continues to depreciate, because the patience of traders banal ended. Three years after the referendum, Theresa May has been actively negotiating with the EU for the last year, but she hasn't been able to agree on a "deal". Local elections in the UK have shown that Theresa May and her party believe less and less of the electorate. And if earlier, the pound often grew on the expectations that the government of Theresa May will still be able to settle all the differences between the Parliament and the European Union, now there is almost no hope. But on the horizon looms the "wonderful" prospect of a second referendum, which the Parliament itself can initiate, if, for example, the fourth attempt to accept Theresa May's agreement fails.

Nearest support levels:

S1 – 1.2695

S2 – 1.2634

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2756

R2 – 1.2817

R3 – 1.2878

Trading recommendations:

The pair GBP/USD continues its downward movement. Thus, short positions with targets at 1.2695 and 1.2634 are now relevant, before Heiken Ashi's indicator turns to the top, which will indicate a turn of upward correction.

It is recommended to consider long positions after consolidation of the pair above the moving average with the targets at 1.3000 and 1.3062. However, at the moment, there are almost no bulls on the market.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – 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.