Overview of the GBP/USD pair. May 17. Is there a real chance of Scotland holding a referendum?

thecekodok

 Technical details: 

Higher linear regression channel: direction - sideways. 

Lower linear regression channel: direction - upward. 

Moving average (20; smoothed) - upward. 

CCI: 10.9600


The British pound also resumed its upward movement on Friday, having adjusted to the moving average line. Thus, in technical terms, everything turned out much more beautiful than in euro/dollar terms. The British pound continues to grow both due to the "speculative factor" and the factor of flooding the US economy with dollars. And there's nothing you can do about it. Traders can only follow the trend and wait for the "dollar madness" to end in the United States. Until then, whatever happens in the UK, the pound will continue to rise. Even such global issues as the unrest in Ireland and Northern Ireland, as a possible referendum in Scotland, do not play a unique role for the pound. We say "for the pound rate," not "for traders" because it is not traders who now "rule" this same rate. It's just that there are more American dollars, so the supply is growing, but the demand is not increasing. Thus, even though the pound has already grown very much over the past year (2800 points from the minimum to the maximum), it may well continue to grow. We will try to understand what at least hypothetically can stop the baseless growth of the British currency.


The very first thing that comes to mind in the current environment is Brexit. Naturally, we are talking about Scotland, which can theoretically leave the United Kingdom. However, in the last year, this topic has become so popular that many have believed that it is possible without even going into the details of this complex process. There is no single article in UK law that would force London to grant Scotland the right to hold an independence referendum. In 2014, when the last such referendum was held, an agreement was made between London and Edinburgh that such procedures would be possible once in a generation. It is what Boris Johnson is now pushing for, refusing Nicola Sturgeon. Technically, Johnson is right. You never know what has changed. There was a treaty that removed the question of independence for at least 50 years. There was a British referendum, where most Britons (not Scots, English, or Welsh, namely the British) voted "for" leaving the EU. And the Scots in 2014 voted to remain British, respectively, to share all common decisions. So now, in theory, Edinburgh has no moral right to demand a referendum and claim that "circumstances have changed." And Boris Johnson has the right, backed by legislation, not to grant any permission for a new referendum. So, from a purely legal point of view, Edinburgh can hold as many referendums as it wants, but they will all be extensive opinion polls. Any court will recognize such a referendum as illegitimate because there is clear legislation that defines this issue. So, in truth, it is unlikely that Nicola Sturgeon will do anything about it at all. She has already promised to hold a referendum by the end of 2023 and probably has some trump cards up her sleeve and leverage over London, but so far, nothing is known about them. So far, the First Minister of Scotland is just putting verbal pressure on Boris Johnson, accusing him of being so bad and not allowing Scotland to vote every 6-7 years again.


Moreover, the recent parliamentary elections, which, although won by the Scottish National Party, are called by many experts ambiguous in public support for leaving the Kingdom. In other words, the Scottish electoral system is as complex as the American one. If you count the votes cast for and against the parties that supported leaving Britain, you get an almost perfect 50/50 equality. The results of the parliamentary elections, where the parties that support "divorce" gained a slight advantage, are not proof that the majority of Scots support "Scottish Brexit." Therefore, even if such a referendum is held, its results are not at all noticeable. Many opinion polls show that the Scottish opinion on this issue is also 50/50. Scots want to return to the European Union rather than a "divorce" from the UK. These are different things and different questions. You can want to stay in the EU and still stay with Britain. And you can want to break off relations with Britain and become independent. Therefore, in this matter, absolutely everything is ambiguous, and it is also not worth putting an end to the UK ahead of time, predicting its complete collapse. But still, this topic is potentially very interesting and important. Therefore, it should not be overlooked.


Unfortunately, the British pound now ignores many potentially and not only important topics. Therefore, we would like to say that now we should pay attention to something specific, but probably for the best, this is not the case. Therefore, now we should take for granted that the US dollar with a probability of 70-75 percent will continue to fall, and macroeconomic reports can impact the pound/dollar pair only in the context of one day, that is, in the short term.


The average volatility of the GBP/USD pair is currently 96 points per day. For the pound/dollar pair, this value is "average." On Monday, May 17, we expect movement within the channel, limited by the levels of 1.3999 and 1.4191. A reversal of the Heiken Ashi indicator downwards may signal a round of downward correction.


Nearest support levels: S1 – 1.4038 S2 – 1.3977 S3 – 1.3916 

Nearest resistance levels: R1 – 1.4099 R2 – 1,.160 R3 – 1.4221


Trading recommendations:


The GBP/USD pair resumed its upward movement on the 4-hour timeframe. Thus, today it is recommended to stay in long positions with the targets of 1.4160 and 1.4191 until the new reversal of the Heiken Ashi indicator down. Sell orders should be opened if the pair's quotes are fixed below the moving average with targets of 1.3999 and 1.3916.