4-hour timeframe
The amplitude of the last 5 days (high-low): 62p - 77p - 46p - 102p - 76p.
Average amplitude for the last 5 days: 73p (75p).
If the EUR/USD currency pair resumed its fall today against the background of the "dovish" speech of ECB head Mario Draghi, then the pound/dollar pair continued to fall without any fundamental information. Today, the main candidate for the post of the prime minister of Great Britain, Boris Johnson, once again declared that no signal should be given to the European Union that Brexit could be postponed to a date later than October 31. Recall that the EU leaders have repeatedly expressed their support for the new Brexit postponement until mid-2020, which Johnson categorically does not accept. The former foreign minister believes that Britain should show the EU resilience and readiness to withdraw without a "deal". This, according to Johnson, will help to achieve a deal, which will be beneficial to the UK. In the meantime, a little more than 4 months remains until October 31. The election of the leader of the Conservative Party and the prime minister will last at least another month. Accordingly, the new prime minister will have a "whole" three months to hold new negotiations with Brussels, which has not yet confirmed their readiness for these negotiations. We believe that such a period is very little to change something in the agreement between London and Brussels. We also believe that the Parliament will block the exit without a "deal". Accordingly, we are compelled to state the fact that Brexit didn't come close to its junction. Politicians who are fighting for the prime minister's seat can make any loud statements to get as many votes as possible, but this changes nothing in essence for Brexit, which has been prolonged for three years. The same Boris Johnson could share information about exactly how he is going to conduct negotiations with the EU and why should the EU cede? However, Johnson, like other candidates for the post, remains silent on this issue. Today, the pound sterling worked at the support level of 1.2525 and may begin an upward round of correction, but it is unlikely to go far up.
Trading recommendations:
The pound/dollar currency pair may start to adjust. The next goal for the short – 1,2525 and 1,2468, we recommend you to retrace them after a turn of the corrective movement is completed.
Theoretically, it will be possible to buy the British currency when the pair has consolidated above the Kijun-sen line. However, the position of the bulls, even in this case, will be extremely weak, and any longs are extremely risky.
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.
Chikou Span - green line.
Bollinger Bands indicator:
3 yellow lines.
MACD Indicator:
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com