4-hour timeframe
The amplitude of the last 5 days (high-low): 138p - 82p - 159p - 73p - 144p.
Average amplitude for the last 5 days: 119p (114p).
On Wednesday, January 30, the GBP/USD pair also started to adjust, which indicates a strengthening of the American currency. Correction for the instrument was brewing in technical terms, plus today's ADP report on employment change in the private sector turned out to be stronger than market expectations. Thus, so far the growth of the US dollar is logical. Then everything will depend on the rhetoric of the Federal Reserve when the results of the meeting have been announced in the evening. The Brexit theme for the short term faded into the background, although it continues to cause a huge number of questions. The fact that yesterday the Parliament approved several amendments to the Brexit agreement does not mean anything yet. All these amendments currently need to be coordinated with the European Union, whose leaders have repeatedly stated that the UK cannot offer anything more interesting and are not ready for new negotiations and even less so for concessions. Also, the proposal to postpone the date of Brexit to a later date was rejected, therefore, March 29 is still the date of the country's exit from the EU. This means that Theresa May needs to re-negotiate with the EU for the remaining 2 months. Given that the next vote on her bill is scheduled for February 13, she has 2 weeks left. Therefore, now the key question is: will the European Union make new concessions, and if not, will it back up the United Kingdom? In fact, the main question now sounds like this: who is more afraid of "hard" Brexit? The pound, which has become quite strong in recent days, may again be under pressure, but, as before, we recommend following the trend, and only when the prerequisites for its completion appear, consider selling options.
Trading recommendations:
The GBP/USD currency pair continues its downward correction. To open new longs, it is necessary to fix the pair above the critical line and preferably above the level of 1.3179. The goal is 1,3331.
Shorts with small lots can be considered now with the goal of 1.2945, but in anticipation of the announcement of the results of the Fed meeting, it is better not to take a risk, but wait for the completion of this process.
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