4-hour timeframe
Technical details:
The upper linear regression channel: direction - up.
The lower linear regression channel: direction - down.
Moving average (20; smoothed) - down.
CCI: -84.3395
The volatility of the GBP/USD currency pair remains low, partly due to a weak fundamental background. To be precise, on Friday and today, this background is simply absent. As in the case of the euro currency, the pair dropped to an important support level of 1.3000, which is still holding it back from further decline. In connection with this key point for the next few days, it remains to be seen whether traders will be able to confidently overcome the level of 1.3000. If so, the downward movement will continue up to 1.2800 and 1.2500, as there is still little fundamental support from the pound sterling. Several positive reports from the UK last week did not even have a significant impact on the course of trading. Therefore, it is also possible to note a certain degree of ignoring by traders of any reports from the United Kingdom. Based on this, both fundamentally and technically, the pound sterling is likely to continue its decline. Meanwhile, in the UK, Theresa May Party members are preparing to resign their leader. The reasons for this call even makes no sense. The main thing is the inability to bring Brexit to its logical end, the inability to negotiate with the EU and the parliament. The second question is that this is not the first time that Theresa May can be dismissed. The two previous no-confidence votes resulted in the parliament refusing to dismiss the current prime minister. However, now there is information that Theresa May will be offered to resign voluntarily.
Nearest support levels:
S1 - 1.2985
S2 - 1.2970
Nearest resistance levels:
R1 - 1.3000
R2 - 1.3016
R3 - 1.3031
Trading recommendations:
The pair GBP/USD continues the downward movement, which is still limited by the level of 1.3000, which has already been tested. Since there will be no news today, the low volatility for the pair is likely to continue.
Buy positions will formally become relevant after the pair is fixed above the moving average line with a short target of 1.3123 - the upper limit of the side channel.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanations for illustrations:
The upper linear regression channel is the blue lines of the unidirectional movement.
The lower linear channel is the purple lines of 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.
Heiken Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company - www.instaforex.com