4-hour timeframe
The amplitude of the last 5 days (high-low): 63p - 72p - 74p - 64p - 43p.
Average amplitude for the last 5 days: 63p (64p).
If the euro "froze in place" against the US dollar on Thursday, then the pound/dollar pair simply "died." From a low to a high of today, the pair passed 25 points. Not a single macroeconomic report was published in the UK or the United States. No new messages on the topics of the China-US trade war or Brexit were also available to traders. Even the two main newsmakers of the last time - Donald Trump and Boris Johnson - did not give high-profile interviews. The American president only once again wrote a Twitter post on the fact that China and the European Union deliberately omit the courses of their national monetary units in order to be more competitive with America. According to Trump, the United States should do the same, that is, cheapen the US dollar in the foreign exchange market. Theoretically, this is possible if America turns on the printing press again and starts to infuse "fresh" dollars into the economy. Recall that from the very first day as the president of the United States, Trump does not part with the idea that the US dollar is of "high cost". In his opinion, it is the expensive dollar that prevents the servicing of the US public debt, the country's trade policy, and also has a negative effect on the trade balance. Now, at the end of his presidency, Trump may even go for open currency interventions in order to lower the US currency. Also, the odious leader in his post threatened to open a currency war in Beijing and Brussels. As we see, relations between the United States and the European Union and China are only heating up. Trump makes it clear that either everyone will play by his rules, or there will be trade and currency wars. But do the Americans themselves support Trump's policies? Recall that in November 2020 there will be elections for a new US president ...
Trading recommendations:
The pound/dollar currency pair has begun a side correction. Thus, traders are advised to wait until it is completed and re-sell the pound sterling with the goal of a third support level of 1.2521.
It will be possible to buy the British currency no earlier than when the pair consolidates above the Kijun-sen line. In this case, the bulls will get a small chance to form an upward trend.
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.
Chikou Span - green line.
Bollinger Bands indicator:
3 yellow lines.
MACD Indicator:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com