4-hour timeframe
The amplitude of the last 5 days (high-low): 73p - 144p - 90p - 62p - 72p.
Average amplitude for the last 5 days: 88p (106p).
On Monday, February 4, the GBP / USD currency pair continues the weakest downward movement, and we still expect a stronger decline from the pair. Although in general, so far all this movement is more like a side. Obviously, traders are not in a hurry with the sales of the pound sterling, as there are quite high chances that there will be no hard Brexit. However, we remind traders that the likelihood that Theresa May will not succeed in forcing Brussels to make new concessions is also very high. The likelihood that negotiations will drag on for several more months is high. Therefore, as has often happened with the pound in recent years, it has grown only on positive expectations, which are now either confirmed or not. In the second case, the British currency may again begin to decline against the US dollar. Just a couple of months ago, the dollar, however, had an additional trump card in the form of the "hawkish" attitude of the Fed. Now, this trump card is not there, so the decline in the pair may not be strong. But anyway, until there is a concrete and formal agreement on Brexit, the pound will continue to remain in limbo. Thus, we are now waiting for the end of Theresa May's trip to European capitals, where she will try to convince EU leaders to make additional concessions or to conclude new agreements in order to "reduce" the desire of the parliament and the position of the EU.
Trading recommendations:
The currency pair GBP / USD maintains the weakest downward trend. Thus, before the reversal of the MACD up indicator, short positions remain relevant in small lots with the target of 1.3008.
Purchase orders can be re-considered no earlier than overcoming the Kijun-Sen line with a target of 1.3175. In this case, the trend will again become upward, but volatility is now reduced anyway, which should be taken into account.
In addition to the technical picture 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.
Chinkou Span - green line.
Bollinger Bands indicator:
3 yellow lines.
MACD Indicator:
Redline and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com