4-hour timeframe
The amplitude of the last 5 days (high-low): 89p - 91p - 93p - 69p - 57p.
Average amplitude for the last 5 days: 80p (106p).
All Monday, May 13, the British pound sterling was in a weak upward correction, but after it became known that Donald Trump had delivered an ultimatum to China, the US dollar sharply increased. The essence of the ultimatum lies in Trump's call to conclude a deal with the United States. According to Trump, it was almost concluded, but Beijing took a step back. Trump is threatened by the fact that American companies may leave China in favor of other countries, and Chinese imports will become very expensive. Also earlier, Trump has already noted that China strongly delays the signing of the deal, while China itself has gone back down because of its unwillingness to change its legislation. Thus, we draw an important conclusion that at this stage of the trade conflict, any escalation supports the US dollar. Therefore, when the trading conditions are strained in the future, this can also lead to the strengthening of the US currency. New data on Brexit now there. From a technical point of view, the pair resumes the downward movement. Thus, the pound sterling is again under pressure. But we have already written about this more than once. Now, in addition to everything else, Trump's actions have started to support the dollar. In general, even without Trump, the pair looked only in one direction, downwards, even despite frequent upward corrections, most of which have no fundamental basis.
Trading recommendations:
The GBP/USD currency pair has bounced off the critical line at the moment. Therefore, it is now recommended to consider sell orders with a target of 1.2926. The downward trend is likely to be resumed.
Buy orders can be considered in small lots only when the price has consolidated above the Kijun-sen line with an initial target of 1.3087.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the 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 Indicator:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com