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4-hour timeframe
The amplitude of the last 5 days (high-low): 77p - 117p - 113p - 50p - 177p.
Average amplitude for the last 5 days: 107p (91p).
The British pound sterling showed a rather strong upward movement yesterday, based on the information that the European Union is not opposed to postponing the UK exit date. Today, there will be a meeting between Theresa May and Jean-Claude Juncker, during which new information on key differences between the parties to the divorce process, the North Irish border and its legal status, might be provided for the markets. European leaders have repeatedly pointed out that they are not ready for new negotiations with London and cannot offer anything more than an agreement already agreed upon. However, Theresa May just has no choice but to try again and again to negotiate with the EU, convincing them to make new concessions. The situation, on the one hand, is in a stalemate, on the other - very simple. One of the parties must give way, taking into account the fact that since last year, there has been no final agreement regarding the border between Ireland and Northern Ireland. As long as there is no such concession, there will be no progress in the negotiations. The date of Brexit will likely be moved, and therefore the whole process may take another year. Therefore, despite the strengthening of the British currency in recent days, this currency does not have a strong growth potential. From a technical point of view, if the pair manages to overcome the second resistance level of 1.3058, the upward movement will continue with the target of 1.3137, which is obtained, given the average instrument volatility over the past five days.
Trading recommendations:
The GBP/USD currency pair might start to adjust as the MACD indicator moved down. Therefore, it is recommended to open new long positions, or after a reversal of the MACD indicator upwards or in case the level of 1,3058 has been overcome.
Sell positions can be considered again with targets of 1.2872 and 1.2786, if the bears manage to seize the initiative on the instrument and consolidate below the critical Kijun-sen line.
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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