GBP/USD. 11 February. Results of the day. Failure on all fronts

4-hour timeframe

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The amplitude of the last 5 days (high-low): 74p - 128p - 54p - 143p - 54p.

Average amplitude for the last 5 days: 91p (94p).

The British pound sterling resumed its downward movement on the first trading day of the new week. There were plenty of grounds for this, even if for a moment we forgot about the whole epic with Brexit. Today, a fairly large package of important macroeconomic reports has been published in the UK. None of the reports showed a positive trend. Industrial production in December fell by 0.9% yoy, GDP for the fourth quarter (preliminary value) fell to 1.3% with a forecast of 1.4%. NIESR's estimate of GDP growth was also worse than expected. Other, less significant reports were also weaker than market expectations. As we all understand, this was enough for the pound to start falling again. The last speech of Theresa May, in which she rejected the idea of keeping the UK in the Customs Union, showed that the parties are still far from consensus and not only in regards to the issue of the Northern Ireland border. The next debate in Parliament is unlikely to change the situation. Therefore, most experts agree that the date of Brexit will have to move from March 29 to a later date, no matter how hard Teresa May tried to avoid it. By the way, the European Union refused to provide legal guarantees for the backstop. From a technical point of view, the pair adjusted to the Kijun-sen line and rebounded from it and resumed the downward movement. The MACD indicator moved down. There is low expectations for positive news for the pound in the near future, so the downward movement will likely continue.

Trading recommendations:

The GBP/USD currency pair resumed its downward movement. Thus, short positions with a prospect of 1.2853 are now relevant, and if this target is overcome, then a goal of 1.2716. There is a high probability that the pair will further decline.

Orders to buy small lots will become relevant after overcoming the critical line. In this case, the first target will be the level of 1.3042, and the trend may change to an upward one.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-sen-red line.

Kijun-sen – blue line.

Senkou span a – light brown dotted line.

Senkou span B – light purple dotted line.

Chikou span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

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

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