4-hour timeframe
The amplitude of the last 5 days (high-low): 112p - 246p - 72p - 169p - 136p.
Average amplitude for the last 5 days: 147p (151p).
The British pound sterling continues to adjust on the first trading day of the week, January 21, but with the minimum volatility for the pair. The critical line is worked out, the rebound from it can provoke the resumption of the upward movement. Two topics remain on the agenda. The first, oddly enough,"Brexit". The second, the"shutdown" in the United States. The second topic is not very interesting for investors, at least for the time being. The first topic has ceased to interest investors in recent days or weeks. The UK's exit from the EU is not discussed now since it been inactive, as it was with bitcoin in its time. And in fact, the country remains in the bloc, the date of its withdrawal from the eurozone it can be moved, the Parliament blocked the plan "A" of Theresa May and, most likely, will block the plan "B", which will be presented today in the house of Commons. The EU is unlikely to make new concessions, and London does not want to leave the EU without a "deal". In general, Brexit and its situation does not change. Regular resignations of ministers in the British Parliament, regular vote of no confidence in Theresa May – all this drives the country into a major political crisis, which is unknown, what could end. The pause taken by traders can be said to be forced and will unlikely last for a long time. Sooner or later, there will be information that will stir up the markets. However, in general, the position of the pound sterling can again be very doubtful. From a technical point of view, the uptrend is maintained for the instrument. A reversal of the MACD indicator to the top indicates an end to the current round of correction.
Trading recommendations:
The GBP/USD currency pair has worked the Kijun-sen line. The rebound from this line will serve as a signal for the opening of longs with a target of 1.3016, and the reversal of the MACD indicator upward will confirm the end of the corrective movement.
It is recommended to consider sell orders not before overcoming the critical line for traders. Only in this case it will be possible to trade for a decrease in small lots with the first target of 1.2722.
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