12.02.202006:08 Forex Analysis & Reviews: Overview of the GBP/USD pair. February 12. Scotland's First Minister Nicola Sturgeon is starting a war with Boris Johnson

4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - downward.

Moving average (20; smoothed) - sideways.

CCI: 18.9795

The GBP/USD currency pair continues to adjust on February 12, as evidenced by the Heiken Ashi indicator. At the moment, the pair's quotes have worked out the moving average line and could not gain a foothold above it. Thus, in the event of a rebound from the moving average, the downward movement can resume, which is quite logical from a fundamental point of view. Yesterday's macroeconomic reports from the UK were interpreted by many traders as positive. Approximately the same reaction of market participants was to the results of the Bank of England meeting at the end of January when nothing changed for the better, but the pound began to rise in price amid the absence of a new negative. The same situation was observed yesterday when the preliminary GDP values for the fourth quarter did not fall but remained at the levels of the previous quarter. It was this fact that provoked the continued strengthening of the pound, and the report on industrial production was ignored, which not only showed another reduction but also turned out to be worse than forecasts. There will be no more macroeconomic information coming out of the UK this week, so traders can only look closely at the US reports. Today, the US Congress will host the second consecutive speech by the head of the Fed, Jerome Powell, but it is unlikely to be more interesting than yesterday.

Meanwhile, Scotland's First Minister Nicola Sturgeon has sent an official letter to London criticizing Boris Johnson's refusal to allow Edinburgh to hold a second independence referendum. Recall that the Prime Minister of Great Britain motivated his refusal by the fact that such an event as a referendum can happen once in a hundred years, and it was already held in 2014 in Scotland. Then, in 2014, the majority of Scots were in favor of maintaining the Union with London. However, in 2016, a general referendum on leaving the EU was held and the majority of Scots voted "against" it. This is what motivates Nicola Sturgeon's desire for a second referendum, whose party won unconditionally in the last parliamentary elections. "The tories are terrified that Scotland has the right to choose its future. They know that if we are given the chance, we will choose independence. In addition, the UK's position is unreasonable, it is completely destructive," the letter says. Ms. Sturgeon also said that the longer London resists the referendum, the more the equality of members of the "Westminster Commonwealth" is called into question. Already this month, the head of the Scottish National Party intends to raise the issue of a referendum in the British Parliament again. It should also be noted that the desire to remain in the EU is not just the desire of the Scottish government. The Scottish people do support this decision, holding rallies against leaving the European Union in major cities. Nicola Sturgeon herself has promised to return to the European Union as an independent state.

Thus, in February, a new epic associated with the UK called the "referendum in Scotland" may begin, and in March, Britain will face negotiations with the European Union on a trade deal, which begins very badly.

The average volatility of the pound/dollar pair has decreased to 85 points over the past 5 days, and the volatility illustration clearly shows that the indicator continues to fall. According to the current volatility level, the working channel on February 12 will be limited to the levels of 1.2863-1.3033. Given the fundamental background, a resumption of the downward movement would be very logical on Tuesday.

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 GBP/USD pair continues its upward correction. Thus, traders are now advised to wait for its completion (a rebound from the moving average) and resume selling the pound with targets of 1.2878 and 1.2817. It is recommended to consider buying the British currency after fixing the price above the moving average line with the first targets of 1.3000 and 1.3062.

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

Explanation of the illustrations:

The highest linear regression channel is the blue unidirectional lines.

The lowest linear regression channel is the purple unidirectional lines.

CCI - blue line in the indicator window.

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

Murray levels - multi-colored horizontal stripes.

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

Possible variants of the price movement:

Red and green arrows.