24-hour timeframe
Approximately the same picture we see in the pair GBP / USD, although the main currency pairs moved recently is not identical. The price has reached the upper boundary of the cloud Ichimoku and has not yet been able to gain a foothold above. Therefore, in this case, the chances of resuming the downward movement are quite good. On Wednesday, the UK inflation report for August will be published and its acceleration is expected, which may force the Bank of England to resume monetary policy tightening amid uncertainty over Brexit talks and a clear political crisis. On Thursday, a report on retail sales will be released. It is recommended to pay close attention to these data. Also, do not forget that until November (deadline for negotiations on Brexit) remains about a month and a half, and the parties, despite all the completion of the fact that 80% have already agreed, there are still key issues to solve, for example, the border of Northern Ireland. Thus, there is no consensus on the most important issues, which negates all progress in the negotiations between the EU and Britain. Either someone will have to make concessions, or there will be no deal. Mark Carney expresses serious concerns about this, warning that the absence of a "deal" with Brussels will lead to an even greater depreciation of the pound sterling and an increase in inflation, which has already to be restrained. He also compared the possible consequences of withdrawing from the EU without a "deal" with the financial crisis of 2008. Thus, it can be assumed that if the parties do not agree, Britain will face a serious crisis, which can not but affect the rate of the British currency, which has already fallen very much against the US dollar in recent years.
Trading recommendations:
The currency pair GBP / USD this week will be able to continue moving upwards if it is possible to overcome the Senkou line of Span B. In this case, the path will be opened to targets 1.3180 and 1.3403. And these goals can be bargained off.
It is recommended to open short positions in the long term only after fixing the price below the Kijun-sen line, which will mean a change in the direction of the trend for the instrument. In this case, the first goal for the shorts will be the support level of 1.2698.
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