4-hour timeframe
Amplitude of the last 5 days (high-low): 93p - 50p - 106p - 92p - 114p.
The average is for 91p (82p).
There was no correction on pound sterling, even if the European currency began to adjust against the background of profit-taking by traders. Shorts for the pound continue to be held by market participants amid expectations of a further decline of this currency. One of the main factors of not believing traders in the pound is the political crisis faced by the Foggy Albion. The likelihood of a "no deal" with the EU grows every day, and the two main negotiators for Brexit from the UK have left their posts. Now everything is in the hands of Theresa May, but it was she who had already announced the preparation of the option with the absence of a "deal" on Brexit with the EU. Thus, given the weak macroeconomic indicators of the country in the first half of the year, there are simply no grounds for buying the British pound. The maximum that a currency can count on is a technical correction, but, as we see, it is not now either. Tomorrow in the UK, reports will be published concerning the level of unemployment, applications for unemployment benefits and changes in average wages, followed by the inflation which is scheduled the day after tomorrow.
However, even now we can assume that the special support for the pound, these data will not have. Thus, only the conclusion of a deal with the European Union on Brexit or the mitigation of protectionism by Donald Trump can save the English currency.
So far, there is no reason to expect either the first or the second. However, even now we can assume that the special support for the pound, these data will not have. Thus, only the conclusion of a deal with the European Union on Brexit or the mitigation of protectionism by Donald Trump can save the English currency.
Trading recommendations:
The GBP / USD currency pair tries to start an upward correction. Thus, now it is possible to fix profit on previously opened shorts and yet be ready for a correction. To reject it is not recommended since it can be extremely weak and even lateral.
Orders for sale can be opened to support levels of 1.2690 and 1.2657 after the correction is completed. In this case, the bears rush into battle with new forces, and the current lows will most likely be updated.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
Explanations to the illustration:
Ichimoku Indicator:
Tenkan-sen is a red line.
Kijun-sen is a blue line.
Senkou Span A is a light brown dotted line.
Senkou Span B - a light purple dotted line.
Chikou Span is a 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