4-hour timeframe
The amplitude of the last 5 days (high-low): 128p - 54p - 143p - 54p - 98p.
Average amplitude for the last 5 days: 95p (91p).
The British pound sterling on Tuesday, February 12, also started to adjust. Thus, with even more confidence we can say that this is a technical correction. If in the case of the Euro there is a high probability that an upward trend will begin, then in the situation with the pound sterling everything is much more complicated. The reason why this is "complicated" is still the same – Brexit. This topic has been on the front page for about two years, but now it has reached its climax. Two years of negotiations and now, by and large, London and Brussels are still far from signing an agreement that would allow for a "divorce" to be amicable. What do we have in the end? Theresa May, balancing on the verge of resignation, continues to try to convince the European Union of its position and force European leaders to make additional concessions, the British Parliament rejects Theresa May's plans of "A" and "B", as it considers them unprofitable. Some European leaders openly urge London to reconsider its decision to withdraw from the EU and even, perhaps, deliberately do not make new concessions, knowing that the current version of the agreement will not be accepted, and the "hard" scenario will not suit the UK. A typical stalemate, which is completely unclear how it will be resolved. All this puts pressure and will continue to put pressure on the pound sterling, for which the uncertainty in recent months is worse than the scenario of a "hard" exit from the EU. Therefore, we believe that the US dollar will continue to rise in price against the pound, as there are no prerequisites for the strengthening of the British currency at the moment.
Trading recommendations:
The GBP/USD currency pair is being adjusted. Thus, it is recommended to renew sell orders if the MACD indicator turns down or the price rebounds from the Kijun-Sen line with targets for support levels of 1.2828 and 1.2786.
Orders to buy small lots will become relevant after overcoming the critical line. In this case, the first target will be the level of 1.2976, but there are no fundamental grounds for such an option 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-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.