GBP/USD. Overview for February 21. The issue of Northern Ireland may be closed in the near future.
February 21, 2023 5:23 am
The GBP/USD currency pair failed to get a foothold above the moving average line on Monday, and it adjusted on Friday. The downward trend so persists, but on Monday there were no changes in general. For the pound, the volatility for the day was only about 40 points. You may simply forget about yesterday because neither macroeconomics nor technology offered anything noteworthy. The pound has not yet fallen below its most recent short-term local low, which is 1.1841. Hence, we anticipate that the decrease will persist. As is the case with the EUR/USD pair. It is excellent that the macroeconomic context has caused expectations for both major pairs to decline. When this isn’t the case, it creates some cognitive dissonance because the euro and the pound are traded similarly most of the time.
The pound has been in a long-awaited correction, much like the euro. Even though there were no compelling reasons for it, the pound managed to increase by 2,100 points in the second half of 2022. In actuality, a retracement away from the worldwide decline was seen. But the surge of 2,100 points also calls for a correction. The British currency has now changed by almost 600 points. This indicates that it is acceptable to drop by 400 points below the previous local minimum. Of fact, the Bank of England’s representatives more forceful language could help the bulls in resuming the upward trend. But, the pair has been modified thus far, and we think that this is completely rational and sensible.
Under the “Northern Ireland Protocol,” the European Union and the United Kingdom can resolve all disputes.
Recently, central banks and rates have received all of the market’s attention. And in the previous year, geopolitics. The “Northern Ireland protocol,” Brexit, and Scotland’s desire to leave the United Kingdom all seemed to be forgotten in the shadow of these events. Yet, it should be noted that the new Rishi Sunak government is expressing its intention to start a rapprochement with the European Union while blatantly disregarding the outcomes of the 2016 referendum. Since it becomes more and more obvious that Brexit was a mistake every year, we believe that this is a positive development for the entire UK. What advantages London has gotten from this is still up for debate. The breakdown of long-standing economic and trade connections with the EU costs the UK economy tens of billions of euros per year. The UK economy has the highest likelihood of experiencing a recession, no new trade agreements with other nations have been reached, and inflation in the UK is greater than in the EU and shows no signs of slowing down. London itself is gradually losing its position as a major financial center. Also, Boris Johnson was actively talking with Donald Trump on this matter and was banking on a trade agreement with the United States. Johnson is no longer the British prime minister, and Trump is no longer the US president.
Yet, it was recently revealed that the “Northern Ireland protocol” dispute between the EU and Britain would soon be resolved after several years of negotiations. The majority of the unresolved issues, including various customs inspections, have reportedly been agreed upon by the parties, according to unnamed individuals close to the negotiating groups. But, sources also claim that several difficulties, particularly those connected to politics, have not yet been settled. Yet there has been considerable progress, so there is every reason to believe that this issue will be resolved within the next several weeks. Although it is difficult for us to predict if the pound will increase as a result (likely not), this is still good news for the UK. We think it’s more crucial for the pound and the British economy to integrate as rapidly as possible with the EU economy. And it will already be important to carefully watch what Rishi Sunak does in this subject. Sunak still needs to collect support to start implementing his plans because not every member of the UK Parliament will be in favor of moving towards the Alliance in the past. But among the British, the desire to rejoin the EU is growing stronger.
Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 126 points. This figure is “high” for the dollar/pound exchange rate. So, on Tuesday, February 21, we anticipate movement that is held inside the channel and is limited by levels 1.1894 and 1.2146. The Heiken Ashi indicator’s downward turn indicates that the downward movement has resumed.
Nearest levels of support
S1 – 1.2024
S2 – 1.1963
S3 – 1.1902
Nearest levels of resistance
R1 – 1.2085
R2 – 1.2146
R3 – 1.2207
Trade Suggestions:
Over the 4-hour timeframe, the GBP/USD pair reversed the downward trend. Hence, in the event of a downward reversal of the Heiken Ashi indicator, we can now consider additional short positions with targets of 1.1963 and 1.1902. If you consolidate above the moving average with targets of 1.2146 and 1.2207, you can start buying.
Explanations for the illustrations:
Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction.
Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction.
Murray levels serve as the starting point for adjustments and movements.
Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day.
A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.
The material has been provided by InstaForex Company – www.instaforex.com
The GBP/USD currency pair failed to get a foothold above the moving average line on Monday, and it adjusted on Friday. The downward trend so persists, but on Monday there were no changes in general. For the pound, the volatility for the day was only about 40 points. You may simply forget about yesterday because neither macroeconomics nor technology offered anything noteworthy. The pound has not yet fallen below its most recent short-term local low, which is 1.1841. Hence, we anticipate that the decrease will persist. As is the case with the EUR/USD pair. It is excellent that the macroeconomic context has caused expectations for both major pairs to decline. When this isn’t the case, it creates some cognitive dissonance because the euro and the pound are traded similarly most of the time.
The pound has been in a long-awaited correction, much like the euro. Even though there were no compelling reasons for it, the pound managed to increase by 2,100 points in the second half of 2022. In actuality, a retracement away from the worldwide decline was seen. But the surge of 2,100 points also calls for a correction. The British currency has now changed by almost 600 points. This indicates that it is acceptable to drop by 400 points below the previous local minimum. Of fact, the Bank of England’s representatives more forceful language could help the bulls in resuming the upward trend. But, the pair has been modified thus far, and we think that this is completely rational and sensible.
Under the “Northern Ireland Protocol,” the European Union and the United Kingdom can resolve all disputes.
Recently, central banks and rates have received all of the market’s attention. And in the previous year, geopolitics. The “Northern Ireland protocol,” Brexit, and Scotland’s desire to leave the United Kingdom all seemed to be forgotten in the shadow of these events. Yet, it should be noted that the new Rishi Sunak government is expressing its intention to start a rapprochement with the European Union while blatantly disregarding the outcomes of the 2016 referendum. Since it becomes more and more obvious that Brexit was a mistake every year, we believe that this is a positive development for the entire UK. What advantages London has gotten from this is still up for debate. The breakdown of long-standing economic and trade connections with the EU costs the UK economy tens of billions of euros per year. The UK economy has the highest likelihood of experiencing a recession, no new trade agreements with other nations have been reached, and inflation in the UK is greater than in the EU and shows no signs of slowing down. London itself is gradually losing its position as a major financial center. Also, Boris Johnson was actively talking with Donald Trump on this matter and was banking on a trade agreement with the United States. Johnson is no longer the British prime minister, and Trump is no longer the US president.
Yet, it was recently revealed that the “Northern Ireland protocol” dispute between the EU and Britain would soon be resolved after several years of negotiations. The majority of the unresolved issues, including various customs inspections, have reportedly been agreed upon by the parties, according to unnamed individuals close to the negotiating groups. But, sources also claim that several difficulties, particularly those connected to politics, have not yet been settled. Yet there has been considerable progress, so there is every reason to believe that this issue will be resolved within the next several weeks. Although it is difficult for us to predict if the pound will increase as a result (likely not), this is still good news for the UK. We think it’s more crucial for the pound and the British economy to integrate as rapidly as possible with the EU economy. And it will already be important to carefully watch what Rishi Sunak does in this subject. Sunak still needs to collect support to start implementing his plans because not every member of the UK Parliament will be in favor of moving towards the Alliance in the past. But among the British, the desire to rejoin the EU is growing stronger.
Over the previous five trading days, the GBP/USD pair has experienced an average volatility of 126 points. This figure is “high” for the dollar/pound exchange rate. So, on Tuesday, February 21, we anticipate movement that is held inside the channel and is limited by levels 1.1894 and 1.2146. The Heiken Ashi indicator’s downward turn indicates that the downward movement has resumed.
Nearest levels of support
S1 – 1.2024
S2 – 1.1963
S3 – 1.1902
Nearest levels of resistance
R1 – 1.2085
R2 – 1.2146
R3 – 1.2207
Trade Suggestions:
Over the 4-hour timeframe, the GBP/USD pair reversed the downward trend. Hence, in the event of a downward reversal of the Heiken Ashi indicator, we can now consider additional short positions with targets of 1.1963 and 1.1902. If you consolidate above the moving average with targets of 1.2146 and 1.2207, you can start buying.
Explanations for the illustrations:
Determine the present trend with the use of linear regression channels. The trend is now strong if they are both moving in the same direction.
Moving average line (settings 20.0, smoothed): This indicator identifies the current short-term trend and the trading direction.
Murray levels serve as the starting point for adjustments and movements.
Based on current volatility indicators, volatility levels (red lines) represent the expected price channel in which the pair will trade the following day.
A trend reversal in the opposite direction is imminent when the CCI indicator crosses into the overbought (above +250) or oversold (below -250) zones.
The material has been provided by InstaForex Company – www.instaforex.com
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