Konstantin Boykachev

CEO Proforexea LLC

Honest Coder

Professional Trader


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Konstantin Boykachev

CEO Proforexea LLC

Honest Coder

Professional Trader

Blog Post

GBP / USD. August 15. The trading system “Regression channels”. All attention to inflation in the UK

August 16, 2018 Analytics


4-hour timeframe


Technical data:

The senior channel of linear regression: direction – down.

The younger channel of linear regression: direction – down.

Moving average (20, smoothed) – down.

CCI: -112.8513

The currency pair GBP / USD on August 14 did not manage to even properly correct. Just a few small purple bars and a descending movement resumed. Thus, risk currencies, in particular, the European ones, continue to enjoy minimal demand in the foreign exchange market. And the reasons for this remain the same, especially in the UK, where market participants do not observe any positive changes. Today in the United Kingdom will be published inflation for July. It is expected that the consumer price index will accelerate to 2.5%. How will traders react to this report? Most likely, in any way. Inflation in the current environment is extremely low for the UK economy. The Bank of England raised the stake at the last meeting, and many experts believe that such a decision was hasty. That first it was necessary to deal with all internal problems, in particular with Brexit, and only then to tighten monetary policy. Thus, even the acceleration of inflation is unlikely to support the pound sterling. American reports on retail sales and industrial production are also unlikely to significantly affect the mood of investors. Thus, the downward movement is likely to continue until traders begin to fix the positions trivially, believing that even lower the pair will not go away. Determine this point can be on technical indicators.

Nearest support levels:

S1 – 1.2695

S2 – 1,2573

S3 – 1.2451

Nearest resistance levels:

R1 = 1.2817

R2 = 1.2939

R3 = 1.3062

Trading recommendations:

The pair GBP / USD resumed its fall. Thus, now it is recommended to stay in short positions or to increase them with the goal of 1,2573. The rebound of the price from the level of 1.2695 can provoke a correction loop, which can confirm the turn of Heikin Ashi upward.

Buy-positions can be considered only after fixing the price above the moving average line with the target of 1.2939. In this case, it can be assumed that the bears at the current stage decided to fix the profit and for a while give the initiative to the bulls.

In addition to the technical picture, one should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The junior channel is linear-violet lines of unidirectional motion.

CCI – the blue line in the regression window of the indicator.

Moving average (20; smoothed) – the blue line on the price chart.

Levels of Murray – multi-colored horizontal stripes.

Heikin Ashi is an indicator that color bars in blue or purple.

The material has been provided by InstaForex Company – www.instaforex.com


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