4-hour timeframe
The amplitude of the last 5 days (high-low): 125p - 123p - 73p - 64p - 188p.
Average amplitude over the last 5 days: 115p (85p).
In the morning, we wrote that Friday's growth of the pair is very difficult to call logical, given the nature of macroeconomic reports from America. Later, it was reported that the political crisis in Britain was gaining momentum, Laborites accused Theresa May of disclosing confidential information about the negotiations on the "deal", and the Conservative Party was defeated in the local elections in Great Britain. As you can see, there is no reason to buy the British pound. Nevertheless, on Friday, and last week as a whole, the pair has seriously strengthened, but this growth looks like an accident - either a technical correction or the results of the actions of major players who entered the market, not for the purpose of making a profit on the exchange rate difference. Thus, we expect the resumption of the downward trend. From a purely technical point of view, in the next few hours, the pair will seek to overcome the Kijun-Sen line, and if it succeeds, the probability of further downward movement will increase many times. In the meantime, there was a piece of new information that Theresa May had held a secret meeting regarding the possible holding of a second referendum. It is noted that a repeated referendum will be possible if required by the House of Commons. The House of Commons can demand it if the Conservative Party and the Labor Party failed to agree to support Theresa May's agreement on the fourth ballot in Parliament. Thus, the people of Great Britain can be offered to once again decide the fate of the country. It is also reported that there will be three voting options in the ballots: Brexit under the terms of Theresa May, "hard" Brexit and refusal to leave the EU.
Trading recommendations:
The GBP/USD currency pair is correcting against the upward trend. Formally, buy orders with a target at 1.3202 remain relevant if the pair bounces off the Kijun-Sen line.
Short positions can be considered in small lots only after the price is fixed below the Kijun-Sen line with the first target at 1.2991.
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