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19.03.202604:39 विदेशी मुद्रा विश्लेषण और समीक्षा: GBP/USD Overview. March 19. Troubling Times Return for the Dollar

The GBP/USD currency pair traded quite calmly for most of the day on Wednesday. Strangely enough, with the opening of the American trading session, the dollar began to strengthen again, although there were no grounds for this. Donald Trump explicitly stated that American troops would soon leave the Persian Gulf region and that the goals of the military operation had been achieved by 90%. Thus, in the near future, we can expect, if not the end of the war, at least its transition to a softer phase.

Unfortunately, oil and gas prices continue to rise, and the consequences of Trump's military operation will take the world a long time to sort out. Iran is not yet willing to allow ships through, except for its own allies, such as China or India. Consequently, the countries of the European Union are experiencing an energy shortage. In any case, the volume of energy resources in the Persian Gulf has significantly decreased following the strikes on oil and gas infrastructure. The issue at this point is no longer the blockade of the Strait of Hormuz, but the complete halt to oil and gas production in many countries in the Middle East. Qatar has stated that it will take at least several months to restore the destroyed infrastructure. During those months, Iran may launch new attacks, so a quick stabilization of oil, gas, and fuel prices cannot be expected.

Last evening, the second Fed meeting of the year took place, and, as is customary, we will not analyze its results until a few hours after its conclusion. In recent weeks, the market has paid absolutely no attention to macroeconomics or fundamentals. Therefore, the reaction to the Federal Reserve meeting may take up to 24 hours and may be very ambiguous, filtered through the lens of the energy crisis and the war in the Middle East. We prefer to wait for the market to fully process this event before making conclusions.

Let's just say that the Fed, thanks to Trump, finds itself in a very complicated position. The labor market still requires stimulation, but after three rate cuts last year, there were hopes for a gradual recovery. However, the US economy also "hit the wall" in the fourth quarter, and with that, the consumer price index may begin to accelerate as early as next month. As a result, the Fed will be forced to contend with the US president's angry outcries against the backdrop of low economic growth and negative labor market data, while trying to keep inflation from rising sharply. However, even this may not be easy to achieve. The Producer Price Index has shown values higher than projected for three consecutive months, and the war in Iran will 100% spur price increases across the board. Thus, Trump has dug himself a hole. Now, the Fed will be unable to conduct easing, as Trump's actions will provoke inflationary growth. Moreover, Kevin Warsh's arrival as the head of the Fed will change nothing since there are still more hawks than Trump's people on the FOMC.

The average volatility of the GBP/USD currency pair over the last five trading days is 98 pips. For the pound/dollar pair, this value is considered "average." On Thursday, March 19, we expect movement within the range bounded by levels 1.3221 and 1.3417. The upper linear regression channel has leveled off, indicating a possible trend reversal. The CCI indicator has entered the oversold area twice, signaling the completion of the correction and forming a new "bullish" divergence.

Nearest Support Levels:

S1 – 1.3306

S2 – 1.3184

S3 – 1.3062

Nearest Resistance Levels:

R1 – 1.3428

R2 – 1.3550

R3 – 1.3672

Trading Recommendations:

The GBP/USD pair continues its correction, which no longer resembles a simple retracement. The global fundamental background remains extremely negative for the dollar. However, for several weeks, the market has focused solely on geopolitics, making all other factors irrelevant. If the price is below the moving average, short positions can be considered, with targets at 1.3221 and 1.3184, based on geopolitical factors. Above the moving average line, long positions remain relevant, with targets at 1.3916 and above, but this scenario requires improvement in the geopolitical backdrop.

Explanations for Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same way, then the trend is strong at the moment;
• The moving average line (settings 20,0, smoothed) determines the short-term trend and the direction of trading;
• Murray levels – target levels for movements and corrections;
• Volatility levels (red lines) – the probable price channel in which the pair will move in the upcoming days based on current volatility readings;
• The CCI indicator – its entry into the oversold area (below -250) or the overbought area (above +250) indicates that a trend reversal is approaching in the opposite direction.

*यहां पर लिखा गया बाजार विश्लेषण आपकी जागरूकता बढ़ाने के लिए किया है, लेकिन व्यापार करने के लिए निर्देश देने के लिए नहीं |

Paolo Greco,
Analytical expert of InstaSpot
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