4-hour timeframe
The amplitude of the last 5 days (high-low): 125p - 75p - 134p - 80p - 58p.
Average amplitude for the last 5 days: 94p (96p).
The British pound sterling has not yet updated its previous local low, so it even has ghostly hopes for being able to strengthen. The main event of the day was the summing up of the election of the prime minister and the head of the Conservative Party of Great Britain. As it is easy to guess, the victory was won by Boris Johnson, the former mayor of London and the former foreign minister. However, traders did not react to this news in any way, logically assuming that it doesn't matter who won, what is important is what happens next with the country, Brexit, foreign economic policy, negotiations with the European Union, relations with the United States and the European Union. That is what really matters. In the near future, after the completion of all formalities, Johnson will take office and then begin to receive any news from the Cabinet of Ministers and Parliament. First of all, regarding the changes and dismissals among ministers and other officials. Some ministers had resigned before today, some said they would not work under the leadership of Johnson. After all the permutations among the ministers, re-election to Parliament is also possible, since the current composition is unlikely to accept the "hard" version of Brexit so hotly pushed by Johnson. Accordingly, the composition of the Parliament will have to be changed, but in this case there is a risk that the Conservative Party will not get the necessary number of votes in order to become ruling. In general, there is a risk for Boris Johnson in any case, because he already promised to withdraw the UK from the EU on time, that is, on October 31.
Trading recommendations:
The pound/dollar currency pair resumed the downward movement. Thus, sales of pound with targets at support levels of 1.2395 and 1.2344 are now relevant.
It will be possible to buy the British currency after the pair is re-consolidated above the critical line, which will lead to a change of trend to growth. The first targets are resistance levels of 1.2532 and 1.2591.
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