4-hour timeframe
Technical details:
The senior linear regression channel: direction - down.
The younger linear regression channel: direction - up.
Moving average (20; smoothed) - up
CCI: 125.3651
The currency pair GBP / USD on Friday, January 25, continues to show steady growth, as indicated by the purple bars of the Heikin Ashi indicator. Yesterday's meeting of the ECB had nothing to do with the British currency, however, we already wrote that the pound is now becoming rather illogical. Of course, you can call the reason for the strengthening of the pound is the American "shutdown", but paired with the euro, the US dollar is growing. The situation around Brexit has already ceased to influence the British currency in any way. Or, traders are well aware that the only way for the pound in the current conditions is down, and they take another "overclocking" before a new long fall. In the meantime, the first bells appeared that there will be no "hard" Brexit with a 99% probability, as well as the fact that the UK exit date from the EU will be postponed to at least May. This was stated by Austrian Chancellor Sebastian Kurz. He also noted that the UK should take steps towards Brussels. In general, it turns out the situation we already wrote about, the negotiations will last as long as necessary, and the "tough" Brexit will be possible only if one of the parties categorically refuses new concessions in order to achieve an orderly Brexit. Given that the previous negotiations lasted almost two years, the new negotiations may also be delayed.
Nearest support levels:
S1 - 1.3062
S2 - 1.3000
S3 - 1.2939
Nearest resistance levels:
R1 - 1.3123
R2 - 1.3184
R3 - 1.3245
Trading recommendations:
The currency pair GBP / USD continues to move up. Therefore, purchase orders with targets at 1.3123 and 1.3184 are relevant now. Turning the Heikin Ashi indicator down will signal a manual reduction of long positions.
Short positions can be considered not earlier than traders overcome the moving average line. The initiative, in this case, will pass into the hands of bears, and the first target for the downward movement will be the level of 1.2878.
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