4-hour timeframe
Technical details:
The senior linear regression channel: direction - down.
The junior linear regression channel: direction - down.
Moving average (20; smoothed) - up.
CCI: 173.6864
The GBP / USD currency pair ended 2018 with a rather tangible growth, which makes it possible to look to the new year 2019 with optimism. Perhaps it will be for the pound sterling a year to recover losses. However, this will require the completion of an epic called "Brexit" in the near future. No new data on the topic of Brexit has been expected to have been received in the past two days. Thus, the strengthening of the British currency is not associated with positive data on the main topic for the UK in recent years. Therefore, the continuation of growth for the pound can be very difficult. Even a fairly strong increase on Monday ended with a rather strong decline as well. Thus, technical factors so far speak in favor of the possible continuation of the upward movement, even if both linear regression channels are directed downwards. From a fundamental point of view, today is expected to publish an index of business activity in the UK manufacturing sector, which has a greater value and impact on the currency than a similar index in Europe or the United States. However, according to experts, this figure is expected to decline from 53.1 to 52.5. Therefore, at this event, the pound may well return to the moving average line.
Nearest support levels:
S1 - 1.2695
S2 - 1.2634
S3 - 1.2573
Nearest resistance levels:
R1 - 1.2756
R2 - 1.2817
Trading recommendations:
The currency pair GBP / USD resumed its upward movement. Therefore, at this moment, long positions are relevant, but in small lots due to the downward orientation of both channels, with targets at 1.2756 and 1.2817. It should also be remembered that there are still no fundamental reasons for the growth of the pound.
Sell positions are recommended to be considered after fixing the price below the MA with targets at 1.2634 and 1.2573. In this case, all trend indicators will signal a downward movement.
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