4-hour timeframe
The amplitude of the last 5 days (high-low): 98 p-95 p-93 p-116 p-93 p.
The average amplitude for the last 5 days: 99 p (103 p).
If the European currency fell on the first trading day of the week, the British pound also fell. And it's not about the Italian budget. A whole range of problems that the UK faced during this year was sometimes forgotten by traders, but it didn't go away. This includes weak macroeconomic indicators, the lack of progress in the Brexit negotiations, the resignation of Boris Johnson and David Davis, and the discontent of the population and the Parliament about how Theresa May negotiates with Brussels and talks about a possible new referendum on the issue of leaving the EU. And this is not a complete list of problems. Yes, from time to time the pound rose in price. Sometimes thanks to Donald Trump and his protectionist policies, sometimes on corrections. But if you look at the weekly chart, the long downtrend is visible to the naked eye. Thus, it seems that now is the time to start a new downward rally for the pound sterling. The only thing that can save the pound from a strong fall this time is at least some kind of decision on Brexit. The market needs certainty, not the words of Theresa May that 95% of the agreement has been reached. Moreover, this kind of information is not confirmed, and official negotiations fail over and over again. If Theresa May is dismissed, it may even have a positive impact on the pound, as the new prime minister may be more productive in negotiations with the EU or this person may not even be afraid to hold a new referendum, during which the country may even abandon Brexit.
Trading recommendations:
The GBP/USD currency pair resumed its downward movement, rebounding from the Senkou line, the first target of 1.2973 was fulfilled. If traders manage to overcome it, the downward movement will continue with the target of 1.2880.
Buy-positions can be considered again not earlier than the price fixing above the critical line. In this case, the trend will change to an upward one, but in the current conditions it is still difficult to expect information that will support the pound.
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-red line.
Kijun-sen – 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:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com