4-hour timeframe
Amplitude of the last 5 days (high-low): 76p - 87p - 68p - 107p - 49p.
The average amplitude for the last 5 days: 77p (97p).
The GBP / USD currency pair passed 49 points on the last trading day of last week and 50 points on Monday, July 30. Explicitly reduced volatility is due to some reasons, first, to the lack of macroeconomic information from the UK and the US, and secondly, with the upcoming meetings of the Bank of England and the Fed. On the eve of these major events, traders do not want to risk and prefer to sit out of the market. Thus, tomorrow, July 31, volatility in the pair may remain low, and on Wednesday the publication of the results of the Fed meeting will take place, after which it is necessary to expect a surge of activity. The meeting of the Bank of England will be held on Thursday and the key issue on the agenda. Many experts believe that it will increase,
At the same time, we do not believe that the issue of tightening monetary policy is resolved. Given all the problems of the UK, economic and political, the Bank of England can and wait with such a serious decision. In this case, the pound sterling can strongly fall in relation to the US currency, since traders will clearly be very disappointed after the expectations of an increase in the rate. Also much will depend on the speech of Mark Carney, focused on the results of the meeting of the regulator. His rhetoric will be important since Carney is known for his cautious utterances and a lot of fears about the future of the country's economy. In general, the British currency has good chances to grow this week, but the Fed and the Bank of England may present surprises.
Trading recommendations:
The GBP / USD currency pair began adjusting f the price is fixed above the Kijun-Sen line, then the actual target for Long will be the level of 1.3188. This goal can already be achieved tomorrow.
Sell-positions are recommended to be opened in case of a price rebound from the critical line or in case the MACD indicator turns down. Then the instrument can resume the downward movement with targets of 1.3075 and 1.3047.
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.
Chikou 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