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the Amplitude of the last 5 days(high-low): 351p – 223p – 272p – 680p – 320p.
the Average volatility over the last 5 days: 370p(high).
the British pound, which broke all records of volatility and depreciation over the past 10 days, the last two trading days spent in correction. With grief in half pound worked the critical line Kijun-sen of Ichimoku indicator. And immediately bounced off it. Thus, bulls showed once again weakness and the downtrend pound/dollar may resume from the beginning of next week. Unfortunately for the pound, fundamental and macroeconomic background now plays no role. Even if traders sold off the pound on the basis of a huge pile of negativity associated with the Brexit, with a low probability of concluding a trade agreement with the European Union, the decline of the British economy in the last three years, uncertainty in the future of the UK, the drop would be less strong. Now, when all the factors influencing the movement of the pair, remained the same, and the addition of the "coronavirus", the pounds just flying into the abyss. Most interesting is that it is absolutely impossible to predict when to end the fall? Logically then, when the peak of the epidemic, it will be possible to localize or to find a vaccine. However, medical experts say about 12-18 months, which will be required to create vaccines and isolate the epidemic has been so far only in China. And then using absolute draconian measures of quarantine. Thus, the pound will continue to fall in price, because most market participants believe the U.S. dollar is the safest currency? And to what levels will continue falling? According to the logic of things to which new buyers of the dollar is no longer there. That is when you will be completely satisfied the demand bears. How long it will take before that point is unknown.
According to the latest information in the UK, the number of infected had risen to 4 000. Not the greatest figure, however, the country introduced a full quarantine. Canceled all sporting events, closure of schools, universities, pubs, cinemas, restaurants. At the same time, it is reported that Britain has begun the first tests of a new drug against a "coronavirus". Prime Minister Johnson was not informed what the drug is treatment of the virus COVID-2019 in a patient. It is expected that the vaccine trials will begin within a month. However, Johnson has warned that it will take time to conduct full-scale testing. Scientists and governments are now interested in the question, is immune to the virus and who he already has? A very serious issue in the context that the virus COVID-2019 can vary with the season and break out every year. Will rooting already ill people they the second time?
Latest summary of economic news comes down only to the actions of Central Banks and governments of the UK and the USA. And these news have already written all the media, and many times. And the fed and the Bank of England expanded its QE program, has lowered the key rate to a minimum, and now consider new ways to stimulate their economies. These are very important steps that can really save both economies from imminent collapse, but they are aimed only to soften the impact of the epidemic, but not completely neutralize it. This time. While we, the ordinary traders can not judge the concrete results of the measures taken. The most important economic indices and indicators published once a month, some two. Because March is not yet ended, there are no numbers for this month for free access has not been received. Obviously, all macroeconomic indicators have deteriorated, but how? It will be known only in April.
So, in fact, we all need to wait for the markets to calm down corny. Exactly when this will happen in the current circumstances is impossible to predict. Panic and the panic that it is impossible to control and it is very difficult to influence. Moreover, oil prices continue to fall, US stocks to decline. Good in only one thing – constantly commodity and stock markets to fall, still can not. The oil can not stay long below the levels of the cost. Even if demand is low on it, if the cost of its production will exceed the market price, then sooner or later the production will be reduced, since it is simply unprofitable to produce. And this applies not only expensive American shale oil, but cheaper in the production of varieties. But there is another side of the coin. Producers of shale oil can start to go bankrupt or to request assistance from the state. And the state is, the United States, headed by Donald trump, who loves to clash and fight. Given that now, according to General opinion, is to blame for what is happening in Saudi Arabia, which was solved by dumping out of the market, competitors, it is possible to expect a new conflict in the middle East, new sanctions, new trials at the international level. Unfortunately, all these actions can only aggravate the situation, which turned out to be the whole world. We believe that to get out unscathed from this situation can only be teamed efforts of all countries. However, this method of solution in the highest political circles not popular.
From a technical point of view, the pair GBP/USD has corrected and is now able to resume the downward movement. As long as the price is below the critical line can be continued to trade down. However, we still recommend to be extreme careful with opening any position.
Recommendations for short positions:
On a 4-hour timeframe the pair pound/dollar completed the corrective movement. So, now again the actual sales of the pair with the objectives 1,1155 and 1,1017, as the price rebounded from the line Kijun-sen.
Recommendations for long positions:
to Buy the pair GBP/USD is recommended only in case of return of quotations in the region above the critical line to the upper border of the Ichimoku cloud. However, when you open any position encouraged to act with maximum caution and be aware of elevated risk.
Tenkan-sen – red line.
the Kijun-sen – blue line.
the Senkou span a – light brown dotted line.
the Senkou span B – light purple dotted line.
the Chinkou span – green line.
the Indicator Bollinger bands:
3 yellow lines.
the Red line and the histogram with white bars in the indicators ' window.
the Levels of support/resistance classical:
the Red and gray dotted lines with price tags.
the Pivot level:
the Yellow solid line.
the Levels of support/resistance, taking into account the volatility:
the Grey dotted line without price tags.
the Possible variants of price movement:
the Red and green arrows.
the Material has been provided by InstaForex company - www.instaforex.com
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