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23.10.201809:51 Forex Analysis & Reviews: GBP / USD. October 23. The trading system. "Regression Channels". Theresa May's optimism astonishes

Long-term review
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4-hour timeframe

Exchange Rates 23.10.2018 analysis

Technical details:

The senior linear regression channel: direction - up.

The younger linear regression channel: direction - sideways.

Moving average (20; smoothed) - down.

CCI: -128.0302

The currency pair GBP / USD continues to fall down. As part of a small upward correction, the pair could not even work out the moving average line and resumed the fall with a new force. We believe that the reaction of the currency market reflects the real state of affairs in the best possible way. Recall that Theresa May recently announced that the Brexit agreement is 95% complete. Also, the British Prime Minister opposed the extension of the transition period. Probably, the remaining 5% is an unresolved issue on the Northern Ireland border, which is the cornerstone issue in the negotiations. We believe that Theresa May is at least cunning. The European Union continues to insist on its position, and its representatives have repeatedly pointed out that the likelihood of Britain leaving the EU without a "deal" is greater than ever. Theresa May says exactly the opposite. If we take into account that it is May that needs to reassure the public, then the conclusion is that it is she who is trying to instill optimism in the masses, which has no reason to. Therefore, we continue to believe that the probability of leaving the Kingdom from the EU without any agreements is much higher than with a "deal". It seems that the markets, which continue to get rid of the British pound, think so. Today will be the speech of the head of the Bank of England Mark Carney. It is unlikely that he will not touch on the topic of Brexit, especially given the fact that large-scale rallies against the exit from the EU under the plan of Theresa May are already taking place in London.

Nearest support levels:

S1 - 1,2939

S2 - 1,2878

S3 - 1.2817

Nearest resistance levels:

R1 - 1.3000

R2 - 1.3062

R3 - 1.3123

Trading recommendations:

The currency pair GBP / USD resumed the increased downward movement and completed the level of 1.2939. If the bears sell this level, the fall will continue with the target of 1.2878 and it is recommended to trade it.

Buy-positions are not yet relevant, as the price is much lower than the MA and at the moment there are no fundamental prerequisites for changing the trend in the instrument.

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

Explanations for illustrations:

The senior linear regression channel is the blue lines of the unidirectional movement.

The junior linear channel is the purple lines of unidirectional movement.

CCI is the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels - multi-colored horizontal stripes.

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

Paolo Greco
Analytical expert of InstaForex
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