4-hour timeframe
The amplitude of the last 5 days (high-low): 126p - 182p - 126p - 112p - 80p.
Average amplitude for the last 5 days: 125p (124p).
On the first trading day of the week, the British pound collapsed due to the actions of Prime Minister Theresa May. The fact is that today the European Court of Justice ruled that the country that initiated the exit from the EU has every right to reverse its decision, that is, to remain a member of the EU. Thus, at the vote of the Parliament, which was to take place tomorrow, the parliamentarians potentially received a new scenario, thereby decreasing the likelihood of Theresa May's Brexit plan. Recall that both among the population and among politicians about 50% do not support the plan of Theresa May or Brexit at all. Thus, at least a few members of Parliament could, thanks to the decision of the European Court of Justice, refuse to support the May plan. And Theresa May's bill has every vote on it. Even without a decision of the EU court on Article 50 of the Treaty of Lisbon, there were serious concerns that Parliament would reject the initiatives of May. Now the probability of this has become even higher. That's probably why Mrs. May canceled tomorrow's vote in Parliament. Thus, the whole process is delayed again, the deadline for the decision of the Parliament is January 21. The pound continues to remain under market pressure, because no positive news from the UK is still coming. Even a disordered Brexit would be good news for the pound, as it would mean the end, albeit bad, of the entire epic in which the UK has been living for two years. But while there is no solution, the pound may continue to fall in the medium term.
Trading recommendations:
The GBP/USD currency pair resumed its downward movement and overcame the level of 1.2645. Thus, we now continue to recommend trading short with the closest targets at 1.2560 and 1.2507.
Buy positions are recommended to open no earlier than fixing the price above the Ichimoku cloud with the target of 1.2827 However, in the near future the execution of this option is unlikely.
In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dotted line.
Chikou Span - green line.
Bollinger 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