03.02.202113:58 Forex Analysis & Reviews: Forecast for GBP/USD, February 3. Scottish paradox to lead to isolation from EU for many decades.

4H chart

Technical indicators:

High Linear Regression Channel: up

Low Linear Regression Channel: down

The moving average (20; smoothed) – down.

CCI: -123.6094

As some traders might have probably noticed, the pound sterling continues to trade according to its own rules. While the European currency in January 2021 at least slightly corrected against its trajectory of 2020, the pound sterling still does not show any signs of correction. The currency is still trading in close proximity to its 2.5-year high. It has been struggling to break above this level for a long time, yet the bullish bias trend does not fizzle. Yesterday, the pound sterling incurred losses. However, the situation may change at any moment as it has been maintained for several months. Besides, some changes are visible on the 4-hour chart. It appears that it does not matter how much the pound sterling falls, the very next day it may recoup its early losses. Investors ignore geopolitical and economic problems in the UK. We have written about them many times, but these thorny issues are sure to affect the UK, pushing the British currency down.

Recently, the Scottish question has become more and more acute. We have already written about this paradox and setbacks for Scotland's probable withdrawal from the UK. In 2014, the country held an Independence referendum. Curiously enough, many people voted against departure. However, now, the majority is more inclined to vote for exit. A similar situation occurred in the 2019 parliamentary elections in the UK. People did not vote for Johnson's party, which eventually won the election and gained full power in the country. They voted for an early Brexit as everyone was tired of living in limbo. In the 2020 US presidential election, people voted not for Joe Biden but against Donald Trump. Well, in the Independence referendum in 2014, people voted to remain in the European Union not to remain in the United Kingdom. In Scotland, there have been many books about that referendum and Scottish bad luck. Many authors believe that if the referendum were held now, the result would be the withdrawal from the United Kingdom. The UK is predicted to play a secondary role on the world stage outside the European Union and a gradual collapse. Many experts and political scientists are sure that if not now, then in 5 or 10 years, but Edinburgh will hold the referendum.

Meanwhile, the Minister for Constitutional Relations, Michael Russell, believes that the country's first minister, Nicola Sturgeon, can hold a referendum in 2021 and without the consent of Boris Johnson. At the moment, it is not entirely clear how this may happen. However, officials are already considering it. According to the latest opinion polls, about 66% of people in Scotland would now vote to leave the United Kingdom if the referendum were held. If Nicola Sturgeon's party(SNP) wins the May 6 Scottish election, it will further boost the chances of a referendum in 2021.

At the same time, British scientists made a statement that the previously identified British strain of the coronavirus mutated and acquired one of the key features of the Brazilian and South African strains, namely, the ability to bypass the immune response of the body. It reduces the effectiveness of the vaccine. British health experts believe mutations are absolutely normal for any virus.

Hong Kong residents are packing their bags and heading to the UK. In 2020, we wrote about the conflict between London and Beijing over the latter's adoption of the law on internal security, which diminished all the autonomy of Hong Kong. At the same time, in response to China's illegal actions, London said that it was ready to grant passport holders of British Overseas Territories residence permits in the UK. However, at first, the UK will only issue a five-year visa, which will give the right to live and work. At the end of this period, people can get a residence permit, and then British citizenship. At the same time, it was reported that several million Hong Kong residents have such passports. Since January 31, a special channel has been opened. It enables holders of a British passport to immigrate to the UK. According to the latest opinion polls, about 44% of Hong Kong residents would like to emigrate abroad.

Traders also awaiting a very important event. On Thursday, the Bank of England will summarize the results of the first meeting in 2021. Investors are braced for changes in the mood of some members of the monetary committee. It is expected that at least one or two members will vote in favor of lowering the rate. The discussion about the possible introduction of negative rates has been dragging on for more than six months. All this time, the Bank of England and its Governor Andrew Bailey have been repeating that they are considering the possibility of negative rates. However, that they have not been slashed, while the British economy is in great need of stimulus. It means that either the regulator will do it only when there are no tools left or it is still studying the effectiveness. At the beginning of 2021, Andrew Bailey said that negative rates are "very problematic", which stimulated the growth of the pound sterling. However, if the Bank of England still signals its readiness to lower the rate in the near future, the British currency is likely to

The average volatility of the GBP/USD pair is currently 103 points per day. For the pound/dollar pair, this value is high. On Wednesday, February 3, we expect movement within the channel, limited by the levels of 1.3545 and 1.3751. A rise of the Heiken Ashi indicator will signal an upward movement.

The nearest support levels:

S1 – 1.3641

S2 – 1.3611

S3 – 1.3580

The nearest resistance levels:

R1 – 1.3672

R2 – 1.3702

R3 – 1.3733

Trading recommendation:

On the 4H chart, the GBP/USD pair resumed the downward movement. Thus, today it is recommended to open deals near the level of 1.3750 if the Heiken Ashi indicator grows. It is not recommended to open short deals.

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