4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – down.
The moving average (20; smoothed) – down.
CCI: -48.7856
The pound worked perfectly on the moving average line, bounced off it and resumed the downward movement. In the first two trading days of the week, no important news from the UK and the States was received. Only last night, Theresa May give an interview in Brussels before the EU summit, in which she said that both sides of the agreement should make concessions to bring Brexit to the finish line. According to Theresa May, who will resign on June 7, the best option is to leave the European Union on the terms described in her "deal". May also said that the "divorce" with the European Union is now the problem of the new Prime Minister. Also, many British tabloids are now discussing the question of what to expect from the new Prime Minister? According to many, it will be Boris Johnson, who is not against leaving the EU without a "deal". However, the Parliament can block this option, in this case, as in the case if the EU rejects the new negotiations on Brexit, the country is waiting for either a second referendum or Parliamentary elections. These options are basic, according to British experts. As you can see, among these options, there is simply no "deal" of Theresa May, which was rejected by Parliament three times. What about the pound? The pound maintains a bearish trend, there are almost no bulls on the market, as well as the prospects for the British currency to strengthen. Thus, we expect the pound to continue falling.
Nearest support levels:
S1 – 1.2634
S2 – 1.2573
Nearest resistance levels:
R1 – 1.2695
R2 – 1.2756
R3 – 1.2817
Trading recommendations:
The GBP/USD pair has completed an upward correction. Thus, it is now recommended to sell the pound with targets at 1.2634 and 1.2573, before the Heiken Ashi indicator turns up, which will indicate a turn of correction.
Long positions are recommended to be considered only after the pair has been fixed above the moving with targets at 1.2756 and 1.2817. However, at the moment, the bulls remain fairly weak.
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 – the blue line of the unidirectional movement.
The lower linear regression channel – the purple line of the 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