4-hour timeframe
The amplitude of the last 5 days (high-low): 59p - 134p - 192p - 211p - 72p.
Average amplitude for the last 5 days: 134p (128p).
The British pound on Tuesday, January 8, also began a correctional movement against the existing "Golden cross". For the pound, there is no such distinct flat as in the case of the euro, however, there are no special grounds for further strengthening of the British currency. The pair rebounded from the level of 1.2800, the previous local low, failing to overcome it. Therefore, from a purely technical point of view, now it is preferable to move down. There are no fundamental reasons for the growth of the American currency today, but they were on Friday when a whole package of frankly successful and strong macroeconomic information was released in the United States, which was completely ignored by traders and partially offset by Jerome Powell's speech with his dovish rhetoric, while the unemployment rate rose by 0.2%, which came as a surprise to the market. Thus, now we expect the pair to decline at least to the critical line, near which the fate of the pound will be decided for the next few days. The movements are calm today, as no important information was available to traders. Tomorrow there will be speeches by Mark Carney, Head of the Bank of England, and US President Donald Trump, which can have a strong impact on the pair. Thus, these events should not be overlooked. As for Brexit, tomorrow, another debate will begin in Parliament on this topic, which will end with a vote on January 15. So far, there is no interesting information about this either.
Trading recommendations:
The GBP/USD currency pair has started to adjust, so new long positions can be opened not earlier than the MACD indicator reversal upwards with the targets of 1.2800 and 1.2868.
It is recommended to consider sell orders not earlier than fixing the price below the Kijun-sen line. In this case, it is expected to fall to the support level of 1.2499, which remains a local low.
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.