4-hour timeframe
The amplitude of the last 5 days (high-low): 86 p – 101 p – 105p – 111 p – 120p.
The average amplitude for the last 5 days: 105 p (99 p).
The British pound also began to adjust, which the MACD indicator signaled with some delay. The grounds for the beginning of a correction are the same as for the EUR/USD pair – technical. However, in the case of the pound, the pair received little support from the foundation, in particular from the UK wage report for September. Excluding bonuses, wages increased by 3.2%, although the forecast predicted an increase of 3.1%. Taking into account the premiums, the increase was 3.0%, which is fully consistent with the forecast. The unemployment rate rose slightly to 4.1%, but traders did not pay attention to it. On the topic of Brexit, new data, and even more optimism for the pound, were not available to traders. Thus, we consider the current pullback up to be a temporary phenomenon, and after a short pause, most likely, the movement down the instrument will resume with a new force. At least, if suddenly Brussels and London suddenly do not agree on the terms of the "deal". But even in this case, we focus on the fact that any of May's plan must be approved by the Parliament, and this can be a problem. Moreover, the press increasingly mentions the possibility of a second referendum, and at least three British Ministers have left their posts because they do not agree with the current conditions of Brexit, which promotes Theresa May. It should also be noted that even these conditions are not accepted by the EU itself, that is, which may cause even greater resonance in parliament and among the population of Great Britain.
Trading recommendations:
The GBP/USD currency pair has started an upward correction. Thus, it is recommended to open a new sell position with the target of 1.2857 after the price rebounds from the critical line or in case the MACD indicator turns downwards.
Buy positions are recommended to be considered not earlier than traders overcoming the Kijun-sen line with targets at 1.3066 and 1.3111. In this case, the British currency will have small chances for a new uptrend, but fundamental support will certainly be required.
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