24.05.202116:18 Forex Analysis & Reviews: GBP/USD. Pound on steroids, theory or failed plan

The UK economy has experienced its deepest recession in three centuries as a result of the coronavirus crisis, as well as years of uncertainty over the decision to leave the European Union. Now that the economy is showing signs of recovery, policymakers and analysts are fantasizing about what can be achieved at a given pace.

According to the country's largest business lobby, Britain needs to seize the opportunity to transform its economy through a series of changes that could cost £700 billion (roughly $990 billion) in commercial growth over the next decade.

The Executive Director of the Confederation of British Industry (CBI), Tony Dunker, argues that the country can recover from the blows of Brexit and COVID-19 by encouraging decarbonization and innovation and leveling its regions.

Dunker stressed that failure to make bold changes now will lead to a normal business cycle, low productivity, and increased social division.

Also, he believes that Britain will never have a greater opportunity to change the economy and society for the better than now: "This is the moment when we have a real chance to make big bets on how the UK economy will grow and compete."

The call to action has been counted, but whether it will be taken seriously and whether the government will be willing to risk big money in large debt is not clear, but hope dies last.

What would we see in the event of drastic economic changes?

The pound on steroids already managed to raise its value to the levels of 2018, but in this case, it would not be a threshold, but only the beginning of a possible path.

You all understand correctly, we are talking about a change in the long-term downward trend from 2008, where at first the local maximum of 2018 - the price region of 1.4350 would be hit, and then a long process of climbing the levels of 2016, 2015, and 2014 would occur.

In simple words, the lateral amplitude of 2017-2021 in the face of price values 1.1400/1.4350 would be replaced by 1.5000/1.7000.

Something from a series of fiction, you say, and I will agree, but when you watch the upward trend in the period 2020 and 2021, there is nothing to be surprised about.

Until all this madness has materialized, let's return to the current chart, where recently there was another attempt to resume the upward cycle, but buyers are still reacting to the 1.4180/1.4224 resistance area, which leads to a reduction in the volume of long positions.

A closed cycle and divergence of trading interests lead to the fact that the quotes draw an amplitude with a scale of slightly more than 100 points (1.4100/1.4230), while the coefficient of speculative operations is still at a high level.

In this situation, it is worth working based on the current situation on the trading chart, and not considering long-term cycles, since the experience of 2020 proved that working on local price changes can give much more understanding and profit than the philosophy of greatness.

The amplitude fluctuation in the range of 1.4100/1.4230 will focus special attention on itself from the side of speculators, who will want to take part in the termination again.

The most optimal trading tactic will be the breakout of one or another amplitude boundary based on a four-hour period.

What is happening on the chart in terms of indicator analysis and market dynamics?

Analyzing different time sectors, we see that technical instruments on the minute and hour periods have a variable Buy/Sell signal due to the price movement along the amplitude of the 1.4100/1.4230 range. The daily period, as before, is focused on an upward cycle, signaling a buy.

In terms of market dynamics, a stage of volatility stabilization is visible, which is focused on the average level. This is a fairly good signal not only in terms of market activity but also in terms of possible market changes, which will be more or less stable in the market.