The GBP/USD currency pair continued to ride on a "swing" on Monday. The day began with the fact that at night the quotes of the British currency fell by 70 points. And in the morning, they increased by 50 points. Considering that no important macroeconomic statistics were published either at night or in the morning, neither in the UK nor in the USA, it is safe to say that the foreign exchange market is now completely under the influence of geopolitical factors. In principle, there is only one such factor - this is the conflict between the United States, the EU, NATO, and Ukraine on the one hand, and the Russian Federation on the other hand. As we said earlier, we don't want to get into this conflict, because everyone has their interests and their truth. However, the situation is now heated to such a state that the war can start at any moment. Of course, there are a huge number of experts who believe and prove that there will be no war. However, with all due respect to these experts, they are not the ones giving the orders, and they may not have all the necessary information. Therefore, at this time, the situation is as follows: Europe is on the verge of a new war, which may affect the interests of very many. The European Union and the United States support Ukraine's desire to join NATO, so they are already helping with money and weapons. But at the same time, both the first and the second also escalate the situation at a time when it is not necessary to do this. Even in Kyiv, Washington has already been urged not to spread outright disinformation and stop sowing panic. However, Washington also has its position and interests. He needs to convince the whole world that Moscow can attack to unite NATO and European countries in this confrontation. In general, this is a complex political and geopolitical game, where only a select few people know the answers to all questions. They can answer the question of how it will end, but they are unlikely to do it.
Boris Johnson is an important figure in the negotiations.
Meanwhile, British Prime Minister Boris Johnson, frankly rejoices that the media attention has finally switched from his persona and "coronavirus parties", which may cost him his post, to the conflict in Eastern Europe. He takes an active part in the negotiation process. Johnson's last announced initiative was a call for European countries to abandon the Russian Nord Stream-2 gas pipeline to reduce dependence on the Russian Federation, as well as to be able to impose "destructive sanctions" against Moscow in the event of an escalation of the conflict in Ukraine. It is not yet known what the European Union thinks about this, but it should be noted that this is far from the only measure that can be imposed against the Russian Federation as part of sanctions. The most effective weapon on the part of the West is the disconnection of Russia from the SWIFT international payment system. However, the West has been threatening these weapons for a very long time and everyone already understands that excluding Russia from SWIFT will damage the West itself, too. In general, as usual, there are a lot of threats, and they sound from both sides. Moscow also does not keep a "regime of silence" and promises its sanctions and measures in case Ukraine joins NATO or sanctions are imposed against it. In general, everyone in the world is now watching only how the situation in Ukraine is, as well as what progress there is in the negotiations, in which many world leaders participate. Naturally, this information also has an impact on the markets, but the situation is such that it is impossible to say, for example: if the escalation of the conflict continues, the dollar will rise in price. This is an assumption. The markets can be very stormy, and collapses are possible (especially for stock markets, which are already in the "risk zone" because the Fed intends to tighten monetary policy in 2022-2023).
The average volatility of the GBP/USD pair is currently 82 points per day. For the pound/dollar pair, this value is "average". On Tuesday, February 15, therefore, we expect movement inside the channel, limited by the levels of 1.3436 and 1.3599. The upward reversal of the Heiken Ashi indicator signals a new round of upward movement.
Nearest support levels:
S1 – 1.3519
S2 – 1.3489
S3 – 1.3458
Nearest resistance levels:
R1 – 1.3550
R2 – 1.3580
R3 – 1.3611
Trading recommendations:
The GBP/USD pair on the 4-hour timeframe continues to trade near the moving in the "swing" mode. Thus, at this time, it is possible to consider short positions with targets of 1.3489 and 1.3458 before the Heiken Ashi indicator turns upwards, but the high probability of a flat should be taken into account. It is recommended to consider long positions if the pair gains a foothold above the moving average, with targets of 1.3580 and 1.3611, but you should also be wary of a flat.
Explanations to the illustrations:
Linear regression channels - help to determine the current trend. If both are directed in the same direction, then the trend is strong now.
Moving average line (settings 20.0, smoothed) - determines the short-term trend and the direction in which trading should be conducted now.
Murray levels - target levels for movements and corrections.
Volatility levels (red lines) - the likely price channel in which the pair will spend the next day, based on current volatility indicators.
CCI indicator - its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.
