4 hour timeframe
The amplitude of the last 5 days (high-low): 99п – 79п – 106p – 90п – 104п.
Average amplitude over the last 5 days: 96p (96p).
The British pound sterling also fell against the US dollar on Tuesday, October 2. At the end of the second trading day of the week, the GBP/USD pair completed the support level of 1.2946 and could not overcome it from the first attempt. Thus, it is now possible to start an upward correction, which can be supported in the Asian trading session. As we see, only the European session closed in a big positive for the dollar; the greenback was held in a quiet and calm trading. During the day, no macroeconomic reports were published in the United States or the United Kingdom, and there were no new reports on trade war or Brexit topics. However, around this time, Boris Johnson will give a speech, who seems to be aiming for the British prime minister's position, and rightly so. Perhaps there will be some new and interesting information. Overall, Theresa May's shift from her post could hit the pound with renewed force. Changes in Parliament often result in a decline in the national currency. And also against the background of such a complex and ambiguous process as Brexit... On the daily timeframe of the pair, it is very clear that although the pound sterling has been growing for 5 weeks, this area can hardly be called a correction compared to the fall of the pound, which began on April 17. Thus, we believe that in the medium term, the chances for a rise in the US dollar are much higher. Only Donald Trump can prevent this if he again actively takes up the depreciation of the US currency.
Trading recommendations:
The GBP/USD currency pair fell to the level of 1,2946. Thus, an upward correction is currently possible, which can be completed in small lots for the purpose of the Kijun-sen line. However, the correction can be very weak.
Sell orders will be possible to open (or keep open), if the pair will overcome the first target 1,2946. In this case, the target for the downward movement will be the support level of 1.2864.
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 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 - 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