4-hour timeframe
The amplitude of the last 5 days (high-low): 42p - 125p - 123p - 73p - 64p.
Average amplitude over the last 5 days: 85p (86p).
The week ends for the GBP/USD pair with a very moderate decline and the development of the critical line. The decline is small, even despite an impressive block of macroeconomic data from the United States. Almost all reports were in favor of the US currency, but this was not the reason for traders to increase purchases of the US currency. It should also be noted that the business activity index in the UK services sector also did not attract any attention of traders, although it did not reach the forecast value, still exceeded the mark of 50.0. From a technical point of view, on the contrary, everything turns out perfectly. The pair worked out the Kijun-Sen line, failed to overcome it and therefore can resume the upward movement, which is very illogical from a fundamental point of view. It should also be noted the low correlation between the euro and the dollar in recent days. The euro falls with pleasure and without interference, the pound – with great difficulty. Just a few minutes ago, it became known that the business activity index in the US ISM services sector was significantly worse than the forecast (55.5 against 57.0), which caused purchases of the British pound and euro. Thus, the week still ends for the pound sterling favorably and is absolutely logical from a technical point of view. However, we continue to insist that there is still no significant fundamental background for the long-term strengthening of the pound.
Trading recommendations:
The GBP/USD currency pair rebounded from the critical line and, thus, completed the downward correction. Therefore, long positions remain relevant to the objectives at 1.3084 and 1.3108.
Sell orders can only be considered after the price is fixed below the Kijun-Sen line with the first target at 1.2939. However, this option should be considered as early as next week.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dotted line.
Chinkou Span - green line.
Bollinger Bands indicator:
3 yellow lines.
MACD Indicator:
A red line and a histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com