4-hour timeframe
The amplitude of the last 5 days (high-low): 144p - 90p - 62p - 72p - 74p.
Average amplitude for the last 5 days: 88p (88p).
After several days of deliberation, the British pound sterling went down, as we had expected. At the moment, the second support level of 1.2942 has been developed. From macroeconomic reports, we note the failed index of business activity in the UK services sector, which was only 50.1 in January. Recall that any value above 50 indicates a positive trend, below - a negative one. As you can see, there is just a little left before the negative trend. Macroeconomic reports from the United States were ignored by traders. And no wonder, since the fall of the British currency has been brewing for a long time, given the complete lack of a decision on Brexit, which would suit both the British parliament and the European Union. And especially given the refusal of EU leaders to sit down again at the negotiating table. A meeting between the European Commission heads Jean Claude Juncker and Theresa May will be held this Thursday. However, we do not expect that in the course of it both parties will be able to agree on any new clauses for agreements or concessions. It seems that the question will rest on whether the British Parliament will accept the previous version of the Brexit plan or reject it a second time. We find out on February 13, a vote on the plan "B" of Theresa May is scheduled for this day, which differs slightly from the plan "A." As we have said more than once, in such conditions it will be difficult for the pound sterling to continue to grow, and the previous growth looks altogether somewhat unfounded. Thus, we now expect the pair to decline to the 2018 lows. The future of the pound will depend entirely on whether it will eventually be possible to achieve a "soft" Brexit or not.
Trading recommendations:
The GBP/USD currency pair continues to move down. Thus, before the reversal of the MACD indicator, sell orders with targets 1.2942 and 1.2871 remain relevant.
Buy orders are recommended to be considered not earlier than the price consolidating above the critical Kijun-sen line. In this case, the initiative on the instrument will return to the hands of the bulls, but it is unlikely to happen in the near future.
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.