4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - upward.
Moving average (20; smoothed) - downward.
CCI: -56.2751
The British pound has also resumed its downward movement and in general, in the last few days, it has been moving identically with the euro/dollar pair. This suggests that the driver of both pairs is now the US currency. The most interesting thing is that nothing interesting is happening in the United States right now. The situation with the "coronavirus" epidemic is not improving, however, it is not getting worse. Rallies continue to take place, however, they also take place in other countries and parts of the world. There is no fresh and exciting information coming from Donald Trump. Moreover, even the topic of confrontation between China and America has somehow stalled recently, and with it the "Hong Kong issue". Thus, there is no news except for ordinary statistics. Jerome Powell's speech in Congress was interesting and even provided a little support for the US currency, however, many of the conclusions that Powell voiced could be easily done by traders themselves. And the key conclusion is this: without a complete victory over the "coronavirus", there will not be a full recovery of the economy to pre-crisis levels.
More or less news can be considered the decree on police reform, which was signed on June 16 by Donald Trump, providing for the improvement of police certification and training programs. It is noted that the standards for the use of force in detention will be new and probably more lenient. It is also reported that a more thorough selection of personnel will be conducted so that the police do not get employees with various violations.
The more interesting news is another opinion poll conducted this time by Reuters, which again showed a strong gap between the Democratic presidential candidate Joseph Biden and the current president of the country, Donald Trump. It is reported that Trump's rating fell to a seven-month low, and Biden's rating rose to a maximum. According to the latest research, 35% are ready to vote for Trump, and 48% are ready to vote for Biden. It is also reported that support for Trump among his fellow party members is also declining and has lost 13% since the beginning of March. At the same time, the head of the election staff of Donald Trump, Tim Murtaugh, said that Joseph Biden deliberately does not give extensive interviews and avoids speaking in front of the public, as he is afraid to answer questions from the press. "We hope that the media will join our call for Joe Biden to end his self – isolation and give Americans what they deserve – a thorough examination and vetting of the person who wants to become president," Murtaugh said.
At the same time, the German government made an official statement calling on EU countries to prepare for the UK's exit without any agreement. It is reported that Berlin is not waiting for the signing of the agreement in July, as Boris Johnson expects. "Since September, the negotiations have entered a hot phase. The UK is already increasing threats against Brussels, wants to solve as much as possible in the shortest possible time and hopes to achieve success in the last minutes of negotiations," the German statement said. "It is important to maintain the unity of all EU member states, continue to insist on parallel progress on all issues, and make it clear that there will be no agreement at any cost," Berlin reports.
The UK, meanwhile, made a big announcement about the world's first drug against "coronavirus". An official government statement reads: "The government has now authorized the use by the National Health Service of the world's first drug for coronavirus with a proven ability to reduce the risk of death. Trials of the drug have shown that it significantly reduces the risk of death among patients who require oxygen treatment." However, a little later it turned out that this is not a new drug, but dexamethasone, which has been known for more than 60 years. And in any case, it does not cure patients of the COVID-2019 virus, but only reduces the risk of death in particularly severe cases. Of course, this is a breakthrough, but not a cure for "coronavirus" in the full sense of the word.
On the fourth trading day of the week in the UK, it is planned to summarize the results of the Bank of England meeting. It is expected that the monetary committee will decide to expand the quantitative stimulus program by 100 billion pounds, from 645 billion to 745 billion. The key rate is likely to remain unchanged at 0.1%. If the British regulator expands the QE program, it will be a "dovish" measure that will be designed to further stimulate the British economy. Indirectly, this will mean that the UK economy is very weak at this time. However, similar programs are being adopted or discussed both in the United States and in the European Union, since all countries of the world initially underestimated the "coronavirus crisis", and now have to pour billions and trillions of dollars into their economies to save them from collapse. Thus, we expect a certain surge of emotions tomorrow when the results of the meeting will be published, however, we do not expect strong growth of the pound or the dollar.
From a technical point of view, we expect to continue moving south. However, the situation is currently unstable and traders can complete the sale of the GBP/USD pair. Thus, it is recommended to carefully monitor the situation and technical indicators. During the last two turns of the up and down movement, neither the local high nor the local low could be updated. Thus, we can say that the pair is now consolidating. This means that even more attention should be paid to "fast" indicators like Heiken Ashi and lower timeframes.
The average volatility of the pound/dollar pair continues to remain stable and is currently 142 points. For the pound/dollar pair, this indicator is "high". On Thursday, June 18, thus, we expect movement within the channel, limited by the levels of 1.2412 and 1.2696. A reversal of the Heiken Ashi indicator upward will indicate a possible new round of upward movement.
Nearest support levels:
S1 – 1.2512
S2 – 1.2451
S3 – 1.2390
Nearest resistance levels:
R1 – 1.2573
R2 – 1.2634
R3 – 1.2695
Trading recommendations:
The GBP/USD pair resumed its downward movement on the 4-hour timeframe, anchoring below the moving average line. Thus, today it is recommended to trade the pound/dollar pair for a decrease with the goals of 1.2451 and 1.2412. It is recommended to buy the pound/dollar pair when the quotes return to the area above the moving average, with the first targets of 1.2634 and 1.2695. It is recommended to be extremely careful with any positions now.
