4-hour timeframe
The amplitude of the last 5 days (high-low): 182p - 126p - 112p - 80p - 253p.
Average amplitude for the last 5 days: 151p (125p).
On the second trading day of the week, the British pound slightly adjusted against the previous day's decline and is trying to resume the downward movement. It even makes no sense now to say that the bulls have little strength. The fact is that now none of the major or small players simply have a desire to buy the British currency. The situation on Brexit is not only not being solved, but is also being dragged out, now by British Prime Minister Theresa May. The refusal to vote in Parliament on Tuesday only means that May is not ready to lose, but understands that it is unlikely she will be able to collect the necessary votes to approve her Brexit plan. On the other hand, it is unclear what the prime minister expected earlier? The fact that the "Chequers" plan has a lot of opponents, like Brexit itself, has been clear since a long time ago. From our point of view, Mrs. May is preparing some unusual move. The second option - the time for which the vote on Brexit is postponed, will be spent to lure as many politicians as possible, tritely agreeing with them. Therefore, we believe that the probability of adopting the Chequers plan remains 50/50. But the pound does not understand this. For several days, the currency of Great Britain was trampled in one place, as if making it clear what awaits the results of the vote. However, when it became clear that the decision of the key issue for the country was again postponed, the pound fell again. Now it doesn't even matter, what options are there in the UK. For the pound sterling, salvation will come only from making at least some decision on Brexit as quickly as possible. Without this, we risk seeing the British pound rate par with the US dollar.
Trading recommendations:
The GBP/USD currency pair slightly adjusted, but now it can resume a downward movement with targets at 1.2463 and 1.2422. There was no rebound from the Kijun-sen line, and with the downward turn, the MACD indicator can be very late. Therefore, the signal as such to sales yet.
Longs can be considered, from a technical point of view, after the traders overcome the moving average line. However, from a fundamental point of view, this option is extremely unlikely in the near future.
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