02.10.201802:04 Forex Analysis & Reviews: GBP/USD. 1 October. Results of the day. The index of business activity in the manufacturing sector helped the pound

4 hour timeframe

The amplitude of the last 5 days (high-low): 104п – 99п – 79п – 106p – 90п.

The average amplitude over the last 5 days: 96п (122 pips).

The British pound sterling on Monday, October 1, in contrast to the euro adjusted to the critical line Kijun-sen. Largely due to the higher value of the index of business activity in the UK manufacturing sector than what traders expected to see. In the morning we wrote that the British IDA can cause a tangible reaction in the market. And it happened. Now the Kijun-sen line has been worked out, and the pair can resume the downward movement. Although from a fundamental point of view, there are no new good reasons for this. However, at the moment we can say that the uptrend is broken, which means that higher prospects are exactly the one that is going down. As for Brexit, the British Minister for issues related to the withdrawal from the EU, Dominic Raab believes that it is better to leave the EU without any "deal" than to remain tied to the bloc through a single market or customs zone. Adding to this opinion all the statements of Theresa May, Michel Barnier and other politicians, it turns out that there is no consensus on what Brexit should be. Moreover, there is no plan by which a "divorce" could be carried out either. The European Union has not provided its version of Brexit, but now we can assume that even if it does, it will be rejected by London. Thus, there was no clarity on this issue, and there will be no further pressure on the pound sterling in the medium term.

Trading recommendations:

The GBP/USD currency pair has adjusted to the Kijun-sen line. The price rebound from this line can be interpreted as a signal to selling with the target level of 1.2973. A reversal of the MACD indicator downwards can confirm the completion of the round of the correction movement.

Buy orders will become relevant if traders overcome the Kijun-sen line. Then the pair risks to return to the uptrend with the first target of 1.3160. However, there are no fundamental grounds for this yet.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

Explanation of illustration:

Ichimoku Indicator:

Tenkan-sen is a red line.

Kijun-sen is a blue line.

Senkou Span A is a light brown dotted line.

Senkou Span B - a light purple dotted line.

Chinkou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and histogram with white bars in the indicator window.