4-hour timeframe
The amplitude of the last 5 days (high-low): 98p - 77p - 117p - 113p - 50p.
Average amplitude for the last 5 days: 91p (92p).
On the second trading day of the week, the British pound sterling received support from the head of the European Commission Jean Claude Juncker. He stated very timely that the decision to postpone Brexit lies with the UK and, if London wants to exercise this right, he should inform Brussels, which, in turn, will not mind. Thus, Juncker did not transparently hinted that London is in no hurry, and there is no deadline for the date of the UK leaving the EU. All this becomes similar to the fact that the European Union is trying to keep the UK in its composition. Indeed, according to Article 50 of the Lisbon Treaty, a country can unilaterally refuse from a decision taken earlier on leaving the EU. A meeting between Juncker and Theresa May will also take place this week. The position on new, additional negotiations, the leaders of the EU have repeatedly voiced: no new negotiations and concessions. Therefore, we can assume that the British prime minister will not achieve anything. Meanwhile, British ministers demanded Theresa May to stop threatening both the EU and Parliament with the "hard" Brexit scenario. The ministers believe that such a tactic could have been successful before, but now, when several large companies have notified the desire to transfer production facilities outside the UK, precisely because of the possible lack of a "contract" between Brussels and London, this tactic has exhausted its usefulness. Moreover, Theresa May continues to put pressure on the "hard" Brexit on the British Parliament itself. Theresa May doesn't seem to have any other plans to satisfy all three parties.
Trading recommendations:
The GBP/USD currency pair continues its upward movement. Therefore we should consider long positions with targets at 1,3013 and 1,3058. Juncker's recent speech provoked the strengthening of the pound, but it has the character of information, which will not be followed by any real and positive action.
Sell positions can be considered again with targets of 1.2830 and 1.2786, if the bears manage to seize the initiative on the instrument and consolidate below the critical line of Kijun-sen.
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