4-hour timeframe
Amplitude of the last 5 days (high-low): 102p - 98p - 87p - 97p - 54p.
The average amplitude for the last 5 days is 88p (101p).
The British pound sterling on Wednesday, September 19, made a fairly powerful breakthrough, followed by an even stronger pullback down. It was connected, first of all, with the publication of the report on inflation for August, which unexpectedly showed the acceleration of the consumer price index to 2.7% y / y. It seems that traders did not expect this and first began to continue buying the pound sterling, and then they realized and started fixing long positions, which led to a significant drop in the British currency intraday. It is also worth noting that Theresa May in her interview reported that the EU should make certain concessions in the negotiations on Brexit, after the Kingdom provided a new version of the "divorce" from the EU, which also made some concessions. Thus, the negotiations, albeit with a creak, are moving. The parties still have about a month to "divorce" amicably, although, in fact, the November deadline has a very conditional value. The parties do not need to shift it to December or January. One way or another, the chances that the parties will still manage to agree are increasing. This can not help but rejoice at Mark Carney, who in the last year, never tires of warning that leaving the EU without a "deal" will be a powerful blow to the UK economy. From a technical point of view, an upward trend is maintained, the price was adjusted to the Kijun-Sen line, which at the moment could not be overcome. Thus, the price rebound from this line may provoke the resumption of the appreciation of the pound sterling.
Trading recommendations:
The currency pair GBP / USD began to be corrected. The price rebound from the Kijun-Sen line will signal the opening of new purchase orders with a target of 1.3224. Leaving the price below the critical line will make long positions not relevant.
It is recommended to open short positions not earlier than overcoming the Kijun-Sen line with a target of 1.3049. In this case, a change in the downward trend may occur on the instrument.
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.
Chinkou 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