4-hour timeframe
The amplitude of the last 5 days (high-low): 73p – 64p – 188p – 89p – 91p.
The average amplitude over the last 5 days: 101p (107p).
From our point of view, after the pound quite unreasonably rose to 1.3170 amid expectations of reaching an agreement between Labor and Conservatives, which will gain the necessary number of votes to support the "deal" of Theresa May, traders returned to the pair's sales, as no data confirming the success of the negotiations were received. Thus, the pound is quite logically returning to its initial positions. Moreover, we still believe that the pair may look to the South exclusively in the coming weeks or even months, as the British pound still has no fundamental support. All of Theresa May's plans to "push" her version of the agreement through Parliament are crumbling. The prospect of holding a second referendum is clearly visible, as the political forces of Great Britain cannot agree among themselves. Thus, there is a high probability that the fate of the country will have to be decided by its people. What will happen to Theresa May in this case? Clearly, the collapse of her political career. She never managed to reach an agreement with all the participants of the "deal". Brexit under threat of failure. We also remind you that this is not the first time there is information that Scotland may hold its referendum on independence, and in this case, the UK may suffer serious territorial and economic losses. In general, this whole situation does not bode well for the country, and the British pound will continue to be inclined to fall.
Trading recommendations:
The GBP/USD currency pair continues a perfectly logical downward movement after it overcame the critical line. Thus, the first target for short positions is the Senkou Span B line, and the next target is the level of 1.2908.
Purchase orders can be considered in small lots only after the reverse consolidation of the price above the Kijun-Sen line with the first target of 1.3263.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
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.
Chinkou Span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD:
A red line and a histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com