4-hour timeframe
The amplitude of the last 5 days (high-low): 98 p-95 p-93 p-116 p-93 p.
The average amplitude for the last 5 days: 99 p (103 p).
The British pound sterling was in a downward rally for the past trading week. In the first half of the week, traders did not expect any new agreements between Theresa May and European leaders to be reached at the EU summit. And in the second half, these expectations were confirmed. Thus, the British pound sterling rose in price only on Friday almost at the close of trading due to profit taking on short positions. The GBP/USD pair managed to adjust to the Senkou span B line, but failed to overcome it. The first three days of the new trading week will be completely empty in terms of macroeconomic data. However, there may be new information on the subject of Brexit. Recall that any decision must still be made. Either the parties recognize a complete failure in the negotiations and the UK will leave the EU without a "deal", or the parties will nevertheless reach a consensus. The second option is not yet calculated. However, any information about this, for example from the British Parliament, can cause a strong reaction from market participants. From a technical point of view, the pair may rebound from the Senkou Span B line or Kijun-sen line and resume the downward movement. The prerequisites for the resumption of the upward movement will appear only if the pair manages to overcome the critical Kijun-Sen line. From a fundamental point of view, there are also no special reasons to expect a serious strengthening of the British currency.
Trading recommendations:
The GBP/USD currency pair has started to adjust. The price rebound from the Senkou span B or Kijun-sen line, as well as the MACD indicator reversal downwards, will serve as a signal to open new sell orders with the target of 1.2967.
Buy-positions can be considered again not earlier than the price fixing above the Kijun-sen line with the target of 1.3165. In this case, the trend will change to upward, but there are no fundamental prerequisites for this yet.
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