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 pair. August 2. Trading system “Regression channels”. Judgment Day for the British Pound

August 2, 2018 Analytics


4-hour timeframe


Technical data:

Senior channel of linear regression: direction – down.

The younger channel of linear regression: direction – down.

Moving average (20; flattened) – sideways.

CCI: -103.8619

The GBP / USD currency pair stood in one place all day on August 1, and even the evening announcement of the results of the Fed meeting did not change anything. The results of the Fed’s meeting did not impress the traders, as there were no changes in the monetary policy. Now all the attention of the markets is focused on today’s meeting of the Bank of England. According to many experts, the British regulator can continue tightening the monetary policy. In this case, the English currency can get market support, which, however, is unlikely to be long. No less important than the results of the meeting will be the speech of the head of the Bank of England, Mark Carney, which may affect the topics of the trade war, Brexit, and monetary policy. His words will determine the mood of traders for the GBP / USD pair in the coming days, as well as the rate, in our opinion. The issue of raising it has not yet been resolved. It is possible that the central bank will not tighten the monetary policy now, given the full range of problems that the UK has faced recently. If the rate is not raised, then a wave of disappointment will overwhelm the markets, and the British pound may fall under serious sell-offs.

Nearest support levels:

S1 = 1.3062

S2 – 1,3000

S3 – 1.2939

Nearest resistance levels:

R1 = 1.3123

R2 = 1.3184

R3 = 1.3245

Trading recommendations:

The GBP / USD pair is still slightly below the moving average. Thus, today, August 2, shorts with a target of 1.3062 are relevant. During the publication of the central bank, it is recommended to transfer. Stop Loss to the breakeven, since there are possible sharp price reversals and a surge in volatility.

Long positions are recommended to be opened only after fixing the price above the removals. In this case, the upward movement can begin with the target of 1.3184. However, if the growth is provoked by the Bank of England, a strong upward spurt is not ruled out, followed by a pullback downward. Thus, with long positions today, one should be extremely cautious.

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.

Heiken 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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