Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - downward.
Moving average (20; smoothed) - sideways.
CCI: 97.6096
The British pound continues to show amazing resilience in the current condition. It seems that the traders of the pound/dollar pair decided to wait until the European currency is sufficiently corrected and then begin to rise in price with it. The pound is now marking time in one place. Its correction in total is much less than the correction for the euro/dollar pair, although it is the euro/dollar pair that has grown less over the past year and should logically have adjusted less as well. Now there is also a fairly popular opinion on the market that the British pound is holding more or less stable because vaccination in the UK is taking place at one of the highest rates in the world. And in the European Union, it is slow. However, let me ask you, why then did the British currency not become cheaper during the two winter "lockdowns"? Why, when everything was relatively calm in Europe with the "coronavirus", the pound sterling continued to grow much stronger than the euro currency, although Britain remains in first place among all EU countries in the number of deaths from the disease and in the number of cases of the disease? Only in recent weeks, France has taken first place in this sad rating (in terms of the number of diseases). The UK authorities have been mercilessly criticized for the failed fight against the "coronavirus" since March last year. And all this time, the pound sterling was doing well and continued to grow. It turns out that the "coronavirus factor" was unimportant to the markets? It turns out that the pound grew based, as we have repeatedly concluded, on the "speculative factor" and on the factor of huge cash injections into the US economy, which led to the inflating of the money supply almost twice! If this is so, then nothing has changed now, because the US authorities still intend to pump their economy with trillions of dollars, and judging by the weakness of the bears, the "speculative factor" has also not gone away. So it turns out that in the case of the pound sterling, the positive aspects from the Foggy Albin do not matter at all. "They don't matter" – because the markets simply don't need any optimistic information. Why, if over the past year, the pound sterling has added 28 cents without optimistic information and is now adjusted by 550 points with grief in half. Look at the long-term chart of the movement of the pound/dollar pair. The pound fell less when there were serious reasons in the form of Brexit than over the past year when Brexit just entered its final phase. In general, from our point of view, the pound remains extremely overvalued. And from this point of view, it would be logical to expect a strong fall in this currency. However, the factors that supposedly contributed to such a strong growth have not gone away, which means that they can cause new growth of the British currency in 2021. At the moment, the bears are trying to stay below the moving average line, but the bulls are starting to exert pressure again, so the "bearish" trend on the 4-hour timeframe may be broken in the coming days.
Meanwhile, the UK issued a statement in which it refused to export the coronavirus vaccine or help other countries with the vaccine voluntarily until it fully vaccinates its entire population. Earlier, the President of the European Commission, Ursula von der Leyen, made statements that the European Union is not ready to help other countries with vaccines, especially those within which vaccines are already produced. Thus, we see that the fight for the vaccine is still there and is serious. The same UK has placed orders for more than 400 million doses of the vaccine, with a current population size of 66 million. It is reported that even neighboring Ireland, London is not ready at this time to supply a vaccine against COVID.
By the way, it should also be noted that yesterday the pound sterling still had reason to rise in price, as the GDP report for the fourth quarter showed an even greater increase than in the first estimate. If a month earlier GDP was + 1.0% y/y and this looked strange, then in the second estimate the indicator was +1.3% y/y, which looks even more strange. However, this is the official statistics and market participants reacted to it with new purchases of the British pound. Fixing the pair's quotes above the moving average line will work in favor of resuming the upward trend. Overcoming the previous local high of 1.3846 will also be of great importance. On the daily timeframe, the level of 1.3712 is of great importance, through which the Senkou Span B line of the Ichimoku indicator runs. It is the consolidation of the price below it that can open up new opportunities for the bears.
The average volatility of the GBP/USD pair is currently 83 points per day. For the pound/dollar pair, this value is "average". On Thursday, April 1, thus, we expect movement within the channel, limited by the levels of 1.3712 and 1.3878. A reversal of the Heiken Ashi indicator back down may signal a new round of downward movement.
Nearest support levels: S1 – 1.3733 S2 – 1.3672 S3 – 1.3611
Nearest resistance levels: R1 – 1.3794 R2 – 1.3855 R3 – 1.3916
Trading recommendations:
On the 4-hour timeframe, the GBP/USD pair again consolidated above the moving average line. Thus, today it is recommended to open new sell orders with targets of 1.3733 and 1.3712 if the price is fixed back below the moving average. Buy orders should be opened after overcoming the moving average with the targets of 1.3855 and 1.3878 and keep them open until the Heiken Ashi indicator turns down.
