4-hour timeframe
Overview:
The pound rate is declining further, the sell signal is still being observed with the first target at 1.5754 not reached yet. The formed sell signal is strong and confirmed, since the Chinkou Span fixated below the price graph and the price is below the Ichimoku cloud. At the moment the first target is 1.5754 – the first support level. If this level is passed the second target will be the second support level at 1.5627. Downside movement remains while the price is below the Kijun-sen (1.5990), if the price fixates above this line it is recommended to cut short positions. The Chinkou Span is below the price graph, which confirms the current sell signal and indicates bearish sentiment. The Bollinger bands show continuing downside movement, the lines are slightly diverging and directed down. The MACD is descending, which indicates current downside movement, therefore it is possible to trade down now, however the reverse of the MACD to the upside will be a signal to cut short positions.
Trading recommendations:
Currently it is recommended to trade down with target at 1.5754 and further to 1.5627. Stop Loss should be placed above 1.5990 and stretched down as the Kijun-sen declines. It is recommended to cut short positions after the MACD reverses u.
In addition to technical image, one should take into account the fundamental data and the time of their release.
Chart annotation:
Ichimoku indicator:
Tenkan-sen — red line
Kijun-Sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator:
3 yellow lines
MACD indicator:
The red line and the histogram with white bars in the indicators window.