04.05.202102:58 Forex Analysis & Reviews: Overview of the GBP/USD pair. May 4. Boris Johnson was embroiled in three high-profile scandals at once. The UK is waiting for an election in Scotland.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - downward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: 18.3124

On Monday, the British pound also began an upward pullback after Friday's fall down. Thus, the euro and the pound were traded on the first trading day of the week almost synchronously. It follows that the reasons for the growth of the two European currencies are currently technical. However, if there is a clear and accurate trend for the euro (both long-term and short-term), there is only a "swing" for the pound. If we expect a new round of downward correction for the euro because it was preceded by a fairly strong and prolonged upward trend, then we expect a new round of downward movement for the pound because we need to complete a new round of "swing" down. Thus, in general, both major pairs trade completely differently. It is the pound that is currently trading in such a way that it is extremely difficult to predict anything specific at all. Recall that the British currency continues to be very close to its 3-year highs, so questions constantly arise, and why is the pound so high and even normally unable to adjust down? We have already answered this question many times, and nothing changes at the moment. The fundamental background from the UK remains the same failure, and it does not affect the pair's movement. Consequently, the markets continue to be guided by the factor of a strong increase in the US money supply, and the "speculative factor" continues to be in force. Therefore, we have a better chance of resuming the global upward trend than strengthening the dollar in 2021.

Although the "foundation" from the Foggy Albion does not affect the pound/dollar pair, it should not be completely rejected. Of course, there is almost no news right now and even less news that could affect the markets. The key topic for the whole of the UK right now is the topic of the Scottish elections. The vote will be held on May 6, that is, this Thursday. Probably, the results of the vote will be known the next day, and it will be possible to say with confidence whether the topic of the independence referendum will continue or not. After all, it is also quite possible that the Scottish National Party will not get enough votes so that the entire Parliament will then approve the idea of a referendum. Moreover, the vote will show how the Scots themselves feel about independence from the Kingdom. Many of them want to return to the EU, but many also believe that now is not the best time to separate from Britain.

Well, while we are all waiting for news from Scotland, Boris Johnson managed to get into several scandals at once. In principle, last year, we repeatedly compared the British Prime Minister with Donald Trump, whose demeanor was very similar. The only difference is that Trump got tired of everyone, from the Democrats to the American people, and he had to leave. Boris Johnson is still holding on to his post, but now he will have to convincingly explain what he meant when he spoke about "mountains of corpses, just not a new lockdown" and where did the money for repairs to his apartment, which is estimated at 200,000 pounds, come from? The Electoral Commission has launched an investigation into the sources of funding for this renovation at 11 Downing Street. The charges are that part of the renovation of the apartment was paid for by a private donation of 58,000 pounds, but Johnson and his fiancee Carrie Symonds did not declare this money. Earlier questions to the Prime Minister were also about his attempt to "hush up" the investigation into the "leak" of the government's plans to introduce quarantine restrictions. However, as political scientists say, the situation with the "mountain of corpses" and the investigation is only interesting topics for newspapers and the media to gossip about. But the money that has not been declared, and regarding which an investigation has already been launched – is serious.

The media reports that Johnson did not just spend the money donated by Lord Brownlow. He spent the money secretly and the money that was intended not for him personally but for the Conservative Party. And just the other day, the former chief adviser to Johnson, Dominic Cummings, added fuel to the fire, who said that Boris Johnson planned to secretly pay for the renovation of his apartment with donations from the party. "Boris Johnson stopped talking to me about renovations in 2020, as I told him that his plans to secretly attract donors to pay for apartments are unethical and stupid, as well as illegal. I refused to help him arrange these payments," Cummings said. From the point of view of British law, Johnson did not commit anything illegal. He had every right to make repairs in his apartment, had the right to attract donations for any purpose. It raises questions about his desire to hide a large amount of donations. As experts say, this can be a serious political accusation. Boris Johnson has already spoken to Parliament about this and said that he paid for all the repair costs out of his pocket. There were no questions about Johnson's salary, as he can afford to spend 200,000 pounds on repairs. However, many Labor and political analysts believe that the Prime Minister's answers were too evasive and vague. In general, perhaps this is just a political game to remove the odious British leader from power, and perhaps this case will end in impeachment or a vote of no confidence.

The average volatility of the GBP/USD pair is currently 97 points per day. For the pound/dollar pair, this value is "average." On Tuesday, May 4, we expect movement within the channel, limited by the levels of 1.3814 and 1.4008. A reversal of the Heiken Ashi indicator downwards may signal a new round of downward movement within the "swing."

Nearest support levels:

S1 – 1.3885

S2 – 1.3855

S3 – 1.3824

Nearest resistance levels:

R1 – 1.3916

R2 – 1.3947

R3 – 1.3977

Trading recommendations:

The GBP/USD pair has started a new round of upward movement on the 4-hour timeframe. Thus, today it is recommended to trade for an increase with the targets of 1.3947, 1.3977, and 1.4008 before the Heiken Ashi indicator turns down. Sell orders should be opened if the price is fixed below the moving average with targets of 1.3855 and 1.3814 and keep them open until the Heiken Ashi indicator turns up. Also, given the continuing "swing," it is not the worst decision to refrain from trading the pair for a while.