4-hour timeframe
Technical details:
The senior linear regression channel: direction - down.
The younger linear regression channel: direction - up.
Moving average (20; smoothed) - sideways.
CCI: -25.2416
The currency pair GBP / USD on Friday, January 18, adjusted to the moving average line. There were no weighty reasons for the fall of the British pound on Friday, however, firstly, on Fridays, profit-taking before the weekend often happens, which leads to corrections, secondly, the previous growth of the pound also had some logical reasons, considering all events of the last week in the UK. Plus, these factors can be added and failed report on retail sales in the UK in December. The increase in the indicator amounted to an annualized rate of only 3.0%, while forecasts predicted a growth of 3.6%. Well, today Theresa May will have to present the so-called plan "B" for Brexit in the British parliament. British parliamentarians will be able to make amendments to it until January 29, when a vote will be held on a new option for the country's withdrawal from the EU. However, it remains unclear what changes will be made to it in order for the document to be approved by the majority of deputies. And how will the EU leaders respond to these edits, and they will also have to agree on these additions? In general, we believe that the whole process of Brexit will again be delayed, and the date of the country's withdrawal from the EU, March 29, can be postponed since it only remains about 2 months.
Nearest support levels:
S1 - 1.2848
S2 - 1.2817
S3 - 1.2787
Nearest resistance levels:
R1 - 1.2878
R2 - 1.2909
R3 - 1.2939
Trading recommendations:
The currency pair GBP / USD has started a downward correction. Thus, it is recommended to open new long positions in case of a rebound of the price from the moving with targets 1.2939 and 1.3000. A 1-2 bar color with a Heikin Ashi indicator in purple will confirm the completion of the correction.
Sell positions will become relevant no earlier than price fixing below the moving average line. The initiative, in this case, will pass into the hands of bears, and the first target for the downward movement will be the level of 1.2817.
In addition to the technical picture, you should also consider the fundamental data and the time of their release.
Explanations for illustrations:
The senior linear regression channel is the blue lines of the unidirectional movement.
The junior linear channel is the purple lines of the unidirectional movement.
CCI is the blue line in the indicator regression window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heikin Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com