4-hour timeframe

The amplitude of the last 5 days (high-low): 62p - 72p - 74p - 128p - 54p.

Average amplitude for the last 5 days: 78p (85p).

The British pound sterling rather unexpectedly corrected to the critical line on Thursday, February 7. Unexpectedly, because all the "rhetoric" of the Bank of England in the face of Mark Carney was very weak and disappointing. Carney noted that the economy is not ready for a Brexit without a "deal" with the EU. After Brexit, the head of the Bank of England has no idea what will happen. Uncertainty on this issue puts pressure on consumers. The terms of the "deal" can be shifted more than once. The consumer price index may fall below the target level of 2.0%. And not a single positive moment. And with all this, the pound sterling first fell to a level of 1.2855, after which it began to grow sharply, which can only mean one thing. Price "demolished" large pending buy orders. It is on this basis that we believe that after working out the Kijun-sen line, the pair will again resume the downward movement, working off all the negatives from Mark Carney. Meanwhile, Theresa May and Jean Claude Juncker's meeting ended in nothing. The parties could not reach an agreement and made a new meeting at the end of February. They also announced the results of their meeting, which, in brief, sound like "the EU does not want to change anything in the current Brexit agreement". At the same time, German Chancellor Angela Merkel demanded clarity from Britain on the Brexit issue. And the head of the European Council, Donald Tusk, said that residents of Great Britain want to stay in the European Union, and the country's political forces lack the courage to cancel Brexit. In general, the passion around this whole process does not subside, so we believe that in the short term, the pound will continue to decline.

Trading recommendations:

The GBP/USD currency pair has adjusted to the Kijun-sen line. The price rebound from this line and the MACD indicator reversal will serve as a signal to open new short positions with targets 1.2898 and 1.2841.

Long positions in small lots will become relevant not earlier than the consolidation of the price above the critical line Kijun-sen. In this case, the first target will be the level of 1.3053.

In addition to the technical picture, fundamental data and the timing of their release should also be taken into account.

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.

Chikou span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

Red line and histogram with white bars in the indicator window.