4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – up.
The moving average (20; smoothed) – down.
CCI: -154.9833
On Thursday, May 16, the British pound continues its non-stop, though not very strong, fall. We believe that the pound does not pay any attention to any macroeconomic reports, as yesterday the US news should have caused at least a small pullback of the pair to the top, and a day earlier – the news from the UK was not so failed that the British currency fell all day. Thus, the main topics for the pound remain Brexit and Donald Trump's actions in the international arena. We have repeatedly said that on the topic of Brexit, it is difficult for the pound to find at least some support. Trump's escalation of the trade war with China and possibly the EU is also likely to play into the hands of the US currency. Thus, for the pound, there is no single factor that would cause demand for it. From time to time, there are corrections in favor of the pound but they are all based either on a clean technique or on the next portion of expectations for a favorable outcome of Brexit. There are no important macroeconomic publications planned for the UK today, as in the United States. Our forecast is the continuation of the pair decline. It will be possible to determine the beginning of the correction by turning the Heiken Ashi indicator up. We still recommend that you carefully monitor any messages from Trump.
Nearest support levels:
S1 – 1.2817
S2 – 1.2756
S3 – 1.2695
Nearest resistance levels:
R1 – 1.2878
R2 – 1.2939
R3 – 1.3000
Trading recommendations:
The pair GBP/USD continues its downward movement. Thus, short positions with targets at 1.2817 and 1.2756 are now relevant, before Heiken Ashi's indicator turns up, which will indicate a round of upward correction.
Buy-positions are recommended to be considered only after fixing the pair above the moving average with the first targets at 1.3000 and 1.3062. In this case, the bulls will get a new chance to form an upward trend.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of illustrations:
The upper linear regression channel – blue line unidirectional movement.
The lower linear regression channel – purple line unidirectional movement.
CCI – 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