4-hour timeframe
The amplitude of the last 5 days (high-low): 86p – 81p – 54p – 59p – 60p.
The average amplitude over the last 5 days: 68p (72p).
As for the pound/dollar pair, the bears did not even want to reduce the "dollar" positions at the end of the month, so great is the desire to sell the pound further. Well, given the serious political crisis in the UK, the resignation of Prime Minister May, the complete uncertainty with the prospects of Brexit, traders can understand. At the end of May, the pound fell to the US dollar by 4.5 cents. The pair has approached the 1.5-year lows, and if the situation in Britain does not improve in the near future, it risks the continuation of the fall. Only the early selection of a new Prime Minister and the unity of the Parliament on Brexit (current or new composition) can save the pound. Traders need clarity on the question: what awaits the country in the future? We are talking not only about private traders but also about major institutional players, banks and Central banks. It is no secret that the pound is used by many large financial institutions as the currency of reserve storage. Given how much the pound fell over the past three years, the share of reserves in the pound declined. It can be reduced in the future, provoking even greater collapses of the British currency. Thus, the Parliament urgently needs to elect a new Prime Minister and begin to agree on the final version of Brexit or re-elect parliamentarians. Given the sharp drop in the popularity of the Labor party and the Conservatives, it is possible that Nigel Farage's party will win in the new parliamentary elections.
Trading recommendations:
The pound/dollar currency pair may start the correction at the end of the month, but has not yet begun. If the MACD indicator turns up, it is recommended to reduce short positions and wait for the correction to be completed for new sales of the pound sterling.
Buy orders can be considered very small lots not earlier than fixing the price above the Kijun-Sen line with the first goal of the Senkou Span B line.
In addition to the technical picture should also take into account the fundamental data and the time of their release.
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.
Chinkou Span – green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD Indicator:
A red line and a histogram with white bars in the indicator window.
