4-hour timeframe
Amplitude of the last 5 days (high-low): 123p - 73p - 68p - 55p - 69p.
The average amplitude for the last 5 days is 78p (76p).
It was a starry day for the English currency, although now, it looks like a calm before the storm. No, as it was not before, there are no weighty fundamental reasons for strengthening the British pound. Thus, a logical conclusion arises where the reasons are purely technical. And then everything falls into place as correction for the pound sterling has been brewing for a long time. The question is, how long will it last? According to the logic of things, in the next few days it may be completed, and traders will start buying new US currency. But now we should monitor the coincidence of technical and fundamental grounds for US dollar purchases. That is, first we recommend waiting for the formation of the "dead cross" on the instrument, and only then consider the shorts as working lots. The fact is that the US dollar has risen in price in recent months, and buying at the peak was always risky. Therefore, we recommend opening new orders for sale only after receiving confirmation that the downtrend is resumed. Moreover, we should take note that any negative message on the topic of Brexit from the UK or a new speech by Trump, which will further aggravate the situation with Turkey or China, may cause a new demand for the American currency. Today such a statement from Trump has already sounded one. The leader of the US denied any concessions to Turkey, well, and quite expectedly accused the country and Erdogan of committing a terrible mistake.
Trading recommendations:
The GBP / USD pair continues its upward movement and surpassed the level of 1.2830. Thus, now it is recommended to remain open to the earlier buy-positions with the target of 1.2911. Turning the MACD indicator down will signal the beginning of the correction.
It is recommended to open sell orders after traversing the Kijun-sen line. In this case, the target for the shorts will be the support level of 1.2664, and the downtrend will be resumed.
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