4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – down.
The moving average (20; smoothed) – sideways.
CCI: -12.5893
Despite the fact that the pound managed to grow decently against the US currency yesterday, by and large, this does not change anything in global trends. The downward trend remains and visible to the naked eye, almost all indicators are still pointing downwards. The epic with the election of the Prime Minister ended, but now begins a new saga called "The confrontation between Boris Johnson and Parliament." The main question that interests everyone is how Johnson intends to implement a "hard" Brexit on October 31, if Parliament does not approve such a decision? Change the composition of the Parliament? There is a risk of losing some of the seats in Parliament, as the popularity of Conservatives in recent years has deteriorated, thanks to the inability of Theresa May to bring Brexit to an end or to agree with the opposition parties. Thus, we believe that the downward trend will continue until there is unambiguously positive information from the UK. America can help the British currency. Yesterday, it turned out that the indices of business activity in the United States, also do not shine with strength and stability. Business activity in the manufacturing sector fell to the level of 50.0, below which, we recall, it is believed that the industry began to decline. The other two indices of business activity are slightly above the level of 50.0.
Nearest support levels:
S1 – 1.2451
S2 – 1.2421
S3 – 1.2390
Nearest resistance levels:
R1 – 1.2482
R2 – 1.2512
R3 – 1.2543
Trading recommendations:
The GBP/USD pair is fixed above the MA, so it is time for the bears to pause. Formally, you can now consider buying the pound sterling with targets at 1.2512 and 1.2543, however, we believe that it is very risky.
It will be possible to sell the pound/dollar pair with the goals of 1.2451 and 1.2421 not earlier than the reverse consolidation of the price below the moving average line. In this case, the initiative in the market will return to the bears.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of illustrations:
The upper linear regression channel – the blue line of the unidirectional movement.
The lower linear regression channel – the purple line of the unidirectional movement.
CCI – the blue line in the indicator regression window.
The moving average (20; smoothed) is the blue line on the price chart.
Murray levels – multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.