4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – down.
The moving average (20; smoothed) – sideways.
CCI: -76.6988
The pound sterling worked out the Murray level of "6/8" - 1.2512 twice, both times failed to overcome it, and eventually resumed its downward movement, securing below the MA. Bulls once again showed their weakness, and the market – not the desire to buy the British currency. And where can this desire come from, if the main campaign slogan of Boris Johnson was "Brexit, no matter, what you become on October 31" and in the first two days of his reign, Johnson declares new negotiations with the EU, hinting that he will be able to conclude another agreement on Brexit, from which the European Union immediately refuses, hinting that it is the United Kingdom that will bear the greatest damage from the "hard" Brexit and not the 27 EU countries. Thus, the new agreement will not be possible, and the Parliament, which did not accept Theresa May's "deal" three times and, at the same time, blocked the "tough" Brexit several times, will most likely reject and once again withdraw from the European Union without an agreement. How the new Prime Minister of the Kingdom is going to meet his election promises is not yet clear. Most likely, he will follow the path of Donald Trump, accusing Parliament of unwillingness to take "difficult but necessary decisions", the European Union – in an unfair attitude to the UK, Theresa May – in the Brexit institution to a standstill. The question is whether the pound sterling will be in demand against such a fundamental background? Hardly. As before, the pound may be adjusted from time to time, but the main trend for the GBP/USD pair remains downward.
Nearest support levels:
S1 – 1.2451
S2 – 1.2421
S3 – 1.2390
Nearest resistance levels:
R1 – 1.2482
R2 – 1.2512
R3 – 1.2543
Trading recommendations:
The currency pair GBP/USD was fixed back below the MA, thus, it is again recommended to sell the pound sterling with targets at the levels of 1.2421 and 1.2390. The downward trend persists.
It will be possible to buy the pound/dollar pair with the goals of 1.2512 and 1.2543 not earlier than the reverse consolidation of the price above the moving average line. In this case, the initiative in the market will be in the hands of very weak bulls for some time.
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