GBP / USD. 29th of August. Results of the day. Brexit: Negotiations drag on, EU prepares special conditions for Britain

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The amplitude of the last 5 days (high-low): 113p - 81p - 72p - 70p - 188p.

The average amplitude for the last 5 days: 105p (95p).

The pound sterling grew by almost 200 points after it became known about the "special offer" of the UK Brexit. This message alone was enough for traders to start active purchases of the pound sterling. From our point of view, nothing super-optimistic happened. First, the essence of this "special offer" is unclear. It is unlikely that Brussels simply decided to cede London to key issues. Secondly, there already appeared information that, most likely, the parties will not have time to agree before October on all conditions of Brexit. And this means that the deadline will be postponed to November or December, which only drags out the process of Britain's withdrawal from the EU. Thirdly, Dominic Raab accused the main negotiator from the EU Michel Barnier in delaying the talks. According to Raab, Barnier does not give proper attention and the necessary amount of time to such an important matter. Thus, we believe that yesterday's strengthening of the pound is temporary, and already in the near future, if the "special offer" is not really beneficial for Britain, the US currency may begin to grow again. Of course, there are other factors that affect the pair and which can prevent the strengthening of the dollar. For example, Trump's policy on the national currency. However, while the main attention is focused on Brexit and any positive for the Albion information can provide strong support for the pound. At the same time, we note the preservation of an upward trend in the instrument. Talk about its completion is still early, technical indicators indicate a move up.

Trading recommendations:

The GBP / USD currency pair resumed the upward movement and almost fulfilled the level of 1.3043. A rebound of the price from this level or a MACD down turn will signal the beginning of a downward correction with a view to a critical line, which we recommend to work out in small lots.

Orders for purchase can be opened or increased on August 29 in case of overcoming by bulls of the level of 1.3043. In this case, the upward movement may continue with a target resistance level of 1.3117, and the bulls will continue to hold the initiative in their hands.

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

Explanations to the illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chinkou Span is a green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and histogram with white bars in the indicator window.

The material has been provided by InstaForex Company - www.instaforex.com