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4-hour timeframe
The amplitude of the last 5 days(high-low): 74p – 60p – 67p – 125p – 75p.
The average amplitude over the last 5 days: 80P(81p).
The British pound is finally able to breathe more or less freely after a report on retail sales in the UK in July showed an increase and was higher than the forecast values, which predicted another decline. Also, support for the British currency was provided by the speech of Michel Barnier, chief negotiator for Brexit from the European Union, in which he said that the EU is open to an alternative proposal for the Northern Ireland border. But this point is very indicative, from our point of view. The pound sterling is growing again on rumors. That is, by and large, Barnier only gave hope to the market that London and Brussels will still be able to agree, and then the pound began to be in demand. Last year and at the beginning of this year, the pound has repeatedly shown growth solely on the expectations of traders, on the expectations of the imminent completion of the entire Brexit procedure, on the expectations of the adoption of the "deal" and each time hopes were not justified, the British currency then fell even lower. What did Barnier essentially say? Only that the EU is still willing to consider an alternative plan for the border between Ireland and Northern Ireland. This does not mean that the terms of the agreement reached with Theresa May will be revised, that this proposal will be approved by the EU countries, the European Commission and the European Parliament. That is, in fact, nothing has changed in the Brexit procedure at the moment, only a new information branch has appeared, which can now also be monitored, since the Forex market reacts to it. Now, we are waiting for the statements of Boris Johnson and Jeremy Hunt regarding the possible alternative on the most fundamental issue.
Trading recommendations:
The pound/dollar currency pair continues its upward correction. Thus, traders are advised to wait until it is completed and re-trade down with the targets at 1.2400 and 1.2391, if the pair rebounds from the line Kijun-Sen.
It will be possible to buy the British currency after the reverse consolidation of the pair above the Kijun-Sen line, which will lead to a change of trend to an upward one. Targets – Senkou Span B line and the level of 1.2621, the minimum lots.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
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.
Chinkou Span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD Indicator:
A red line and a histogram with white bars in the indicator window.
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