4-hour timeframe
Technical details:
The senior linear regression channel: direction - up.
The younger linear regression channel: direction - up.
Moving average (20; smoothed) - sideways.
CCI: -85.3707
The currency pair GBP / USD on Monday, February 4, with great difficulty entrenched below the moving average line. Thus, the trend in the instrument has changed to downward, but the volatility of the last days shows that the bears have little strength yet. On the other hand, the bulls, most likely, have already exhausted their potential. As we have already written more than once, there were no good reasons for such a serious strengthening of the British pound. Thus, according to the general logic, a decrease in the currency pair is very likely. In the meantime, Theresa May is going to Brussels to hold new talks with EU leaders. As before, the North Irish border and backstop remain the stumbling block. Theresa May will intend to change the very concept of "backstop" or change it to some kind of "alternative agreement". What will come of all this is still unknown, but the media will continue to receive data on this issue and on the whole Brexit topic. So far, leaders unanimously declare that there will be no new negotiations and the final version of Brexit is the best that the EU can offer to London. However, with this version of Brexit itself will not. Since the UK Parliament has blocked this option. In general, the epic continues. In the UK today there will be an index of business activity in the construction sector, and it may have a certain impact on the movement of the pair.
Nearest support levels:
S1 - 1.3062
S2 - 1.3000
S3 - 1.2939
Nearest resistance levels:
R1 - 1.3123
R2 - 1.3184
R3 - 1.3245
Trading recommendations:
The currency pair GBP / USD has overcome the moving. Therefore, short positions with targets of 1.3000 and 1.2939 have become relevant now. It is recommended to wait for overcoming the level of 1.3062 and turning the Heikin Ashi indicator down to open the short positions.
Orders for the purchase can be considered in the event of a reverse price fixing above the moving average with the target of 1.3184. But, as we have said, there are no fundamental grounds for the continued growth of the pound.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanations for illustrations:
The senior linear regression channel is the blue lines of the unidirectional movement.
The junior linear channel is the purple lines of the unidirectional movement.
CCI is the blue line in the indicator regression window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heikin Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com