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4-hour timeframe
The amplitude of the last 5 days (high-low): 253p - 158p - 195p - 77p - 137p.
Average amplitude for the last 5 days: 164p (153p).
On the first trading day of the new week, the pound sterling, following the euro, showed a strengthening. There were no good fundamental reasons for the strengthening of the British currency, however, the growth of the pound was not strong enough to start panicking. Normal corrective growth. At the same time, the pair remains close to its lows, maintaining a high chance of resuming the downtrend. As we have already written more than once, the best that a pound can wait until the vote on the Theresa May Bill's Brexit bill in the British Parliament is the lack of new and strong falls. The strong growth of the British currency can not be expected at all. Today, no important macroeconomic reports have been published in the United States and Europe. Therefore, there were no factors that could affect the course of trading. There is new information that Theresa May might resign in the second quarter of 2019, but this is not new information. Rumors about this have been circulating for a long time. If the vote on the"Chequers" plan will fail, then this will be almost a 100% accomplished fact. Technical factors are now fading into the background, since only in the last trading day the lines Kijun-sen and Tenkan-sen crossed two times. Bollinger bands are narrowing, signaling a decrease in volatility. In general, the pound sterling can befall the fate of the euro, which in recent weeks is frankly flat. And again, this will be a very good scenario for the British currency.
Trading recommendations:
The GBP/USD currency pair is being adjusted. It will be possible to resume trading for a decrease in small lots not earlier than the reverse consolidation of the price below the critical line with the target of 1.2451. You should also wait for the MACD indicator to turn down.
Buy positions will become relevant if the bulls are able to overcome the Ichimoku cloud with the goals of the resistance levels of 1,2734 and 1.2767. However, even in this case, it is not necessary to count on a strong strengthening of the pound.
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-red line.
Kijun-sen – 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:
Red line and histogram with white bars in the indicator window.
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