4-hour timeframe
Technical details:
The senior linear regression channel: direction - down.
The junior linear regression channel: direction - down.
Moving average (20; smoothed) - down.
CCI: -167.4649
The GBP / USD currency pair of the beginning of 2019, with a massive fall by more than 350 points. However, this is not remarkable, but the fact of updating the previous local minimum. More precisely, the breakdown. For the pound, there is only one positive news now. The fact that traders failed to consolidate below the previous price low. That means there is a chance for growth, especially as the day is approaching when a vote will be taken in the British Parliament. As we have said before, for the British currency now it does not even matter which of the Brexit options will be adopted as a result. Pound needs certainty. Even if this is a "hard" option, a new fall on this information may not be, as now the British currency is falling not just like that, namely on the fears of the market that the "divorce" from the EU will not be orderly. And at the moment everything goes exactly to the fact that Brexit will be disordered. The idea of holding a second referendum in parliament is not much favored. Nobody is in a hurry to use the opportunity to cancel Brexit, in principle, based on the decision of the European Court of Justice, and Theresa May fails to win over a sufficient number of parliamentarians to pass her bill. Today in the UK, the index of business activity in the construction sector, and in the United States will be published, the index of business activity and the ISM report on the level of employment ADP.
Nearest support levels:
S1 - 1.2512
S2 - 1.2451
S3 - 1.2390
Nearest resistance levels:
R1 - 1.2573
R2 - 1.2634
R3 - 1.2695
Trading recommendations:
The currency pair GBP / USD resumed its downward movement. Therefore, short positions are relevant now, but it is too dangerous to open them at the end of the movement and without correction. Now the most likely start of the correction, since the important support level of 1.2475 could not be overcome.
Buy positions are recommended to be considered after the price is fixed above the moving average line with targets at 1.2695 and 1.2756. However, as before, it will be difficult for the bulls to stay above the MA for a long time.
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