4-hour timeframe
Technical details:
The senior linear regression channel: direction - down.
The junior linear regression channel: direction - down.
Moving average (20; smoothed) - down.
CCI: -23.8064
The GBP / USD currency pair continues to be located below the moving average line, but over the past day has made quite a strong breakthrough to the top. Traders favorably perceived the information about the imposition of a vote of no confidence in Theresa May, since they had already lost hope of a positive outcome of Brexit under her leadership. We recall that earlier, 5 ministers voluntarily resigned as a sign of disagreement with the foreign policy of the prime minister, and, in particular, with her plan "Checkers". Thus, the number of dissatisfied talks between May and EU leaders is growing every day. Now, there is a rather high probability that May will be dismissed. In this case, the pound sterling may grow even more, and further will depend entirely on the new prime minister and leader of the Conservative Party and his views on Brexit. There is even a possibility that the UK will withdraw its desire to leave the EU. From a technical point of view, the pair is currently adjusted to the moving average line. A rebound from the MA may trigger a resumption of a downtrend. It will be possible to expect the formation of an uptrend no earlier than overcoming the moving average line.
Nearest support levels:
S1 - 1.2573
S2 - 1.2512
S3 - 1.2451
Nearest resistance levels:
R1 - 1.2634
R2 - 1.2695
R3 - 1.2756
Trading recommendations:
The GBP / USD currency pair remains in a downward mood. Thus, the turn of the indicator Heikin Ashi down will be a signal for the opening of new short positions with targets of 1.2512 and 1.2451.
Long positions are recommended to be considered not earlier than the Bulls overcome the moving average line. But even in this case, it is recommended to start with small lots, since the pound is still extremely weak.
In addition to the technical picture, you should also consider the fundamental data and the time of their release.
Explanations for illustrations:
The senior linear regression channel is the blue lines of the unidirectional movement.
The junior linear channel is the purple lines of the 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.
Heikin Ashi is an indicator that colors bars in blue or purple.
The material has been provided by InstaForex Company -
www.instaforex.com