The GBP/USD currency pair also started falling on Friday, which was not provoked by either macroeconomic statistics from overseas or British statistics. However, in the case of the pound, this movement does not look strange. The fact is that the pound has been getting more expensive for almost a month without a single correction and managed to add about 600 points against the dollar during this time. We have already discussed the possible reasons for this growth in previous articles. However, even against the background of statistics in favor of the British currency, this fall does not look strange, although it is also "purely technical" in nature, as in the case of the euro/dollar pair. Even if you look at the whole picture, it becomes clear that the "foundation" is now basically ignored by traders. But the pound is growing very logically, from a technical point of view, since the 24-hour TF clearly shows that the nature of the movement over the past year resembles a "downward swing", that is, with deep corrections against the main (downward) movement. In addition, on the 24-hour TF, the pair rebounded from the important 38.2% Fibonacci level, which also contributed to the growth. Now, a deeper correction can be expected for the pound. But can we expect a new round of decline? This topic is very complex, as there are a huge number of factors that should be taken into account now. Britain remains the number one provider of various non-economic news. They are not particularly taken into account by traders yet, but they may start doing so in the future.
Boris Johnson organized a party the day before the funeral of the husband of the Queen of England.
In the UK, for a whole week, everyone has been doing nothing but discussing the behavior of Prime Minister Boris Johnson, as well as a whole crowd of his colleagues. Recall that at the end of last year, it was reported that Boris Johnson had a Christmas party in 2020. Just at a time when a "hard" quarantine was introduced in the country, and the British were forbidden to meet in groups of more than 2 people and even to see relatives on holidays. However, this story is overgrown with new details. It turned out that Johnson hosted parties in the spring of 2020 (when he was also quarantined), and in April 2021. Moreover, the last party took place on the eve of the funeral of Duke Philip, the husband of Queen Elizabeth II. And this is only the information that was leaked to the press. Only the British Prime Minister himself knows how many such parties there have been over the past two years. At the same time, it is hardly possible to talk about false information to denigrate the government. Boris Johnson has already apologized to the whole country for the lockdown party in the winter of 2020, and also apologized to the Queen for the party the day before her husband's funeral. That is, Johnson admitted his guilt, therefore, these events took place. To be honest, sometimes it seems that we are not talking about the UK, which claims a significant role in the international arena, but about some third-world country. Such several scandals related to the ruler, perhaps, do not exist in any other country. Johnson's behavior can only be compared with the behavior of his friend Donald Trump, who left his post very quickly. It seems that Boris Johnson himself is waiting for a similar fate. At least, his political ratings continue to fall both among the population and his party. This year, the question of changing the leader of the Conservative Party may arise, and various analytical portals are already calculating the probability of Johnson's resignation in 2022. It is noteworthy that Johnson himself stated that there was no alcohol at the party, all participants adhered to the rules of social distance, and he appeared there for only 25 minutes and he got the impression of a "working atmosphere". That is, according to Johnson, it was practically a meeting in Parliament in masks, and journalists who report tons of alcohol taken out of the nearest supermarket that day are "all lying." Labor is already calling on Johnson to resign.
The average volatility of the GBP/USD pair is currently 76 points per day. For the pound/dollar pair, this value is "average". On Monday, January 17, thus, we expect movement inside the channel, limited by the levels of 1.3596 and 1.3749. The upward reversal of the Heiken Ashi indicator signals a possible resumption of the upward trend.
Nearest support levels:
S1 – 1.3611
S2 – 1.3550
S3 – 1.3489
Nearest resistance levels:
R1 – 1.3672
R2 – 1.3733
R3 – 1.3794
Trading recommendations:
The GBP/USD pair continues a strong upward movement on the 4-hour timeframe. Thus, at this time it is recommended to consider new longs with targets of 1.3733 and 1.3749 if the price bounces off the moving average line. It is recommended to consider short positions if the pair is fixed below the moving average with targets of 1.3550 and 1.3489, and keep them open until the Heiken Ashi indicator turns upwards.
Explanations to the illustrations:
Linear regression channels - help 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.