4-hour timeframe
Amplitude of the last 5 days (high-low): 106p - 92p - 114p - 61p - 123p.
The average amplitude for the last 5 days is 99p (85p).
The Full-scale decline of the British pound continues. During the day, the consumer price index was published in the UK, which as expected, accelerated to 2.5% in July. However, this still did not cause either the purchase of the British currency or the fixation of dollar positions. In the United States today, changes in the volume of industrial production (+ 0.1% in July) and retail sales (+ 0.5% in July) were published. It's hard to even say if the traders reacted to this news. Most likely, the dollar at a quiet pace would continue to go up, without these macroeconomic reports. Proceeding from all this it follows that the main factor for the analysis of the pair is now technical. The price is steadily located below the Kijun-Sen line. Thus, the maximum that can now be expected from the British currency is a correction to this most critical line. In general, the pair remains in a stable downward movement. As the trend shows, such movements are the longest - when there are no deep and frequent corrections. Thus, the British pound urgently needs strong macroeconomic data, and this should not be the usual reports on economic indicators because they are simply not paying attention to them.
Trading recommendations:
The GBP / USD currency pair resumed its downward movement and almost fulfilled the level of 1.2657. A rebound in prices from this level can provoke an upward correction, which is unlikely to turn out to be strong. Nevertheless, this will signal a manual reduction of shorts, as well as a reversal to the top of the MACD.
It is recommended to buy orders if traders overcome the Kijun-Sen line. In this case, the British currency will have some chances of strengthening, and traders will have at least some reason for opening longs.
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