4-hour timeframe
Technical details:
The senior linear regression channel: direction - down.
The junior linear regression channel: direction - down.
Moving average (20; smoothed) - down.
CCI: -169.5358
The currency pair GBP / USD on Wednesday, December 5, resumed the intensified downward movement after a rebound from the Murray level of 4/8. As we have repeatedly said, there are still no compelling reasons for the growth of the pound sterling. Therefore, the maximum that the UK currency can count on in the current conditions is a technical correction. Even yesterday, the information that the UK has the full right to refuse Brexit unilaterally, caused only a brief strengthening of the British currency. After that, the fall resumed with the overcoming of a very important and strong support area of 1.2720 - 1.2700. Today in the UK, index of business activity in the services sector will be published, and from the United States is not expected to receive any important information. Also, it was reported that the deputies of the House of Commons initiated the consideration of the case of disrespect of the Cabinet of Ministers to the legislature due to the refusal of the May government to provide a detailed assessment of the consequences of leaving the country from the EU. Now, the chances that Theresa May's initiatives will be approved by Parliament are reduced even further. In general, there is still no positive news for the pound. A vote in parliament on December 11, which will be preceded by a 5-day debate, will be a key event for the UK in 2018.
Nearest support levels:
S1 - 1.2695
S2 - 1.2665
S3 - 1.2634
Nearest resistance levels:
R1 - 1.2726
R2 - 1.2756
R3 - 1.2787
Trading recommendations:
The currency pair GBP / USD resumed its downward movement. Therefore, at the moment, short positions with targets of 1.2665 and 1.2634 are again relevant. The downward trend in the instrument persists, turning Heikin Ashi to the top will indicate a round of local correction.
Buy orders will become relevant small lots with targets of 1.2817 and 1.2848, if the bulls manage to overcome the moving average line. However, even in this case, the strong growth of the British currency can not be expected.
In addition to the technical picture, you should also consider the fundamental data and the time of their release.
Explanations for illustrations:
The senior linear regression channel is the blue lines of the unidirectional movement.
The junior linear channel is the purple lines of the unidirectional movement.
CCI is the blue line in the indicator regression window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels - multi-colored horizontal stripes.
Heikin Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com