4-hour timeframe
The amplitude of the last 5 days (high-low): 80p - 119p - 138p - 82p - 159p.
Average amplitude for the last 5 days: 115p (111p).
On Monday, January 28, the GBP/USD pair began a weak downward movement, as the MACD indicator signaled a downward turn. At the same time, Theresa May, or rather, its speaker said that negotiations with the government are continuing on amendments to the agreement with the EU and "the Parliament will be given a second chance to pass the bill." It sounds rather ironic, as no special changes were made to plan "B". That is, Theresa May is trying to push through the Parliament, by and large, the same "Chequers" plan with perhaps minimal adjustments. And at the same time continues to try to put pressure on Parliament, threatening chaos after the "hard" Brexit and the lack of alternatives to its plan. "Trying", because as long as her efforts do not have much weight in parliament and with a 90% probability, the evening vote on Tuesday will also end in failure. Recall that Theresa May has already announced two votes of no confidence, but she still manages to stay in her position. In general, all this can be described as a political crisis that began not yesterday, and a political mess that has been going on for at least a few months, during which 5 Ministers left their posts in disagreement with the policy of Theresa May. Everything was supposed to end on March 29, but it seems that the date of Britain's exit from the EU will be postponed, and the Parliament, Theresa May and the EU will bargain for a long time and discuss the conditions. We still recommend following the trend, as from a technical point of view it is ideal, not paying attention to the lack of fundamental reasons for the growth of the pound sterling.
Trading recommendations:
The GBP/USD currency pair has started a weak correction. The reverse reversal of the MACD indicator to the top will serve as a signal to open new longs with a target at 1.3394. The uptrend remains above the critical line.
Short positions are recommended to be considered after overcoming the Kijun-sen line. In this case, it will be possible to trade for a fall in small lots with the first goal of the support level of 1.2945.
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