4-hour timeframe
The amplitude of the last 5 days (high-low): 59p - 60p - 86p - 63p - 72p.
Average amplitude for the last 5 days: 68p (64p).
The British pound sterling continues to grow at a very sluggish pace against the US currency. Jerome Powell's words yesterday that the US economy may need to be stimulated in the near future because of all the ups and downs between the United States and China, Mexico, and perhaps even the EU, did not provide strong support for the pound sterling. That is why we believe that, firstly, Powell's words were given too much importance, and secondly, traders continue to look more towards selling the pound than towards purchasing. It is all connected with the same Brexit and political crisis in the UK. Therefore, if the euro shows a fairly strong growth, then there is a very indirect price increase in the pound. Meanwhile, Donald Trump, whose official visit to London continues, announced the names of the politicians he would like to see as prime minister. If the first name of the question does not arise - Boris Johnson, the middle name - Jeremy Hunt, who is an enemy of Brexit. However, the likelihood that Boris Johnson would take the post is still much higher. Johnson himself believes that the country should leave the EU before October 31, since carrying over Brexit to a later date may finally deprive the ruling Conservative party of support for the electorate and kill the trust in it completely. From a technical point of view, the pound/dollar pair may continue its upward movement, but its pace now leaves too many unanswered questions. In particular, is the pound being bought at all now, or are bears simply reducing their "dollar" positions? One thing is clear for sure - if positive news does not start coming from the UK, the pound can return to a downward trough at any time.
Trading recommendations:
The pound-dollar currency pair continues a slight upward correction. Formally, it is now possible to consider longs with a target level of 1.2794, but the positions of the bulls are still in doubt. Upward movement can be completed quickly and abruptly.
Sell orders can be considered if traders manage to return the GBP/USD pair below the critical line. In this case, the target for the downward movement will be the support level of 1.2540.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen - the red line.
Kijun-sen - the 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 Indicator:
Red line and histogram with white bars in the indicator window.