4-hour timeframe
Amplitude of the last 5 days (high-low): 170p - 106p - 116p - 91p - 80p.
Average amplitude over the last 5 days: 113p (113p).
How much the US-China trade war affects the dollar in pairs with European currencies can be judged using the GBP/USD pair. Unlike the euro/dollar pair, bears did not begin to take profits, as it logically suggests an even greater decline in the pound. Indeed, the most interesting topic for all traders is Brexit, and there is no movement in it, there is no positive news, there is no hope for a favorable outcome. There is only one track along which the train rushes in full steam, and at the end of the track there is a wall with the inscription "hard Brexit". The train has no brakes ... The driver, Boris Johnson, does not even try to find salvation for the locomotive, but, on the contrary, throws even more coal into the furnace. Therefore, there is no reason for the foreign exchange market to stop selling the pound, even despite the escalation of the trade conflict between the United States and China, which could potentially harm the US economy and could force the Fed to cut interest rates in the future. But what does it matter for the pound if the UK can begin to lose gigantic amounts in 3 months? By the way, the pound, according to many analysts, could be cheaper than the dollar as a result of the hard Brexit. Today, the index of business activity in the UK services sector unexpectedly pleased traders, exceeding the forecast value and amounted to 51.4. However, the British currency did not really help. The weak ISM US index of business activity did not help either. In general, a correction for the pair is certainly possible, but has a lower probability of occurrence than the same euro/dollar pair. It will be possible to determine its beginning by overcoming the Kijun-sen line or by Bollinger Bands, which can turn up or to the side (as now).
Trading recommendations:
The GBP/USD currency pair may start a correction movement. Thus, it is now recommended to wait until the completion of this round and resume selling the pound with a target level of 1.2031.
It will be possible to buy the British currency not earlier than consolidating the pair above the critical line, but with extreme caution and in small lots. Ideally, the Bollinger Bands should be directed upwards. The target is 1.2254.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com