Source: Forex Analysis
4 hour timeframe
The amplitude of the last 5 days (high-low): 211p – 72p – 93p – 94p – 73p.
Average amplitude for the last 5 days: 109p (132p).
On the last trading day of the week, the British pound sterling rushed higher because of the news on GDP for November, which exceeded the forecast by 0.1% and amounted to 0.2% in monthly terms. However, traders in unison on purchases of the British pound dried up very quickly, since the indicator of industrial production for the same period collapsed in annual terms by 1.5% and in monthly terms by 0.4%, while forecasts predicted higher values. However, from our point of view, a significant event occurred for the pound, particularly the breakdown of the strong resistance area of 1.2800. This means that from a technical point of view, there is now nothing to stop the pound sterling from continuing to grow. If it were not for the outstanding issue with Brexit, the probability of the pair climbing would be high. In our case, everything, as before, will depend on the decision taken by the Parliament on January 15. Certain signals that a “soft” Brexit is still possible to appear from time to time but we recommend not trying to guess what the outcome of this procedure will be. It is better to wait for the final decision and accurately understand and realize that the UK will be waiting in the coming months and years. So far, all the hints, half hints and rumors from the European Commission or the British Parliament have no weight under them. We remind you how many rumors about positive progress in the negotiations were throughout the previous year. Every time a pound on these rumors becomes expensive, but in the end, everything could end without any deal for both parties.
The GBP / USD currency pair has resumed its upward movement, but this growth can be extremely short. Therefore, we do not recommend opening new long positions at the end of the trading week, especially since it is nearing January 15th.
There are no grounds for opening orders for sale now either. Hence, we recommend waiting for the start of the new week, perhaps over the weekend new information from Britain will appear.
In addition to the technical picture, you should also consider the fundamental data and the time of their release.
Explanation of the illustration:
Tenkan-sen – the red line.
Kijun-sen – the blue line.
Senkou Span A – light brown dotted line.
Senkou Span B – light purple dotted line.
Chikou Span – green line.
Bollinger Bands indicator:
3 yellow lines.
Red line and histogram with white bars in the indicator window.
The material has been provided by InstaForex Company – www.instaforex.com