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4-hour timeframe
The amplitude of the last 5 days (high-low): 69p - 42p - 125p - 123p - 73p.
Average amplitude for the last 5 days: 86p (82p).
Over the past two days, the British pound also moved away from local highs. The Bank of England meeting was held in the UK today. However, it is highly expected that monetary policy remains unchanged. The key rate is kept at 0.75%. All 9 members of the monetary committee voted to maintain the current level of the rate. Thus, it is unlikely to be changed in the coming months. The Bank of England's planned volume of the repurchase of assets also remained unchanged. In connection with today's most significant event, Mark Carney's speech is expected. However, just looking at the pair's schedule, it becomes clear that Carney did not say anything important or interesting. He only noted that further reductions in stimulating the economy were necessary, but not at the moment. He also highlighted a slight increase in wages, as well as the fact that companies did not expect resolution of the issue on Brexit in the near future. Inflation is still below the regulator's target levels. Overall, the market knew all this before the meeting, so there was no tangible reaction. Thus, the technical picture for the pair remains the same and is similar to that of the EUR/USD pair. The instrument is adjusted against the upward trend. It has all the chances to resume growth. Although, similar to the euro's case, there is no fundamental background that was able to provide long-term support for the British currency. Therefore, we believe that the downward trend's resumption is more likely.
Trading recommendations:
The GBP/USD currency pair started a downward correction. Thus, now it is recommended to consider long positions with targets of 1,3084 and 1,3111, but after the completion of the current correction.
Shorts will become relevant only after the reverse consolidation of the price below the Kijun-sen line with the first goal of 1.2939. The Bank of England meeting did not have a proper impact on the pair.
In addition to the technical picture, one should also take into account the fundamental data and the time of their release.
Explanation of the illustration:
Ichimoku indicator:
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.
MACD Indicator:
Red line and histogram with white bars in the indicator window.
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