4-hour timeframe
Technical data:
The upper linear regression channel: direction – down.
The lower linear regression channel: direction – sideways.
The moving average (20; smoothed) – down.
CCI: -78.5633
On Wednesday, May 8, the British pound continues to move downwards despite the lack of important macroeconomic reports from the UK or the US, as well as the lack of important news on Brexit. As we have already said, this is a test by traders of unconfirmed information that laborers and conservatives will be able to agree on the Brexit agreement. The pound has been growing regularly in the last year on rumors, and then collapses on the harsh reality. Now, the same situation. There are no prerequisites to expect that the parties will be able to agree. It was also reported that, despite the obvious displeasure with the actions of May within her own party, the Prime Minister will retain his post until at least the autumn of 2019. Thus, there is still a chance for Theresa May to bring Brexit to its logical end. It is difficult to say whether this is good news for the pound or bad. From our point of view, the new Prime Minister would have more chances to reach an agreement in the triangle "Parliament – Prime Minister – European Union". However, Theresa May does not want to surrender, and neither does she admit her defeat. Thus, the UK remains mired in a political crisis, and the pound remains prone to fall against the US currency.
Nearest support levels:
S1 – 1.3000
S2 – 1.2939
S3 – 1.2878
Nearest resistance levels:
R1 – 1.3062
R2 – 1.3123
R3 – 1.3184
Trading recommendations:
The pair GBP/USD has overcome the moving. Thus, the trend for the instrument has changed to a downtrend and short positions with the targets at 1.3000 and 1.2939 have become relevant, the first of which has already been worked out. The reversal of the Heiken Ashi to the top will indicate the corrective cycle.
Buy-positions are recommended to be considered only after the pair is reversed above the moving with the target at 1.3123.
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 – blue line unidirectional movement.
The lower linear regression channel – purple line unidirectional movement.
CCI is 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.
