GBP / USD. January 11th. The trading system. “Regression Channels”. The pound is in prostration.

4-hour timeframe

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Technical details:

The senior linear regression channel: direction – down.

The younger linear regression channel: direction – up.

Moving average (20; smoothed) – up.

CCI: 24.5871

The currency pair GBP / USD on Friday, January 11, corrected to the area of the moving average line, but, unlike the Euro currency, there are no signs of a resumption of the upward movement. Thus, we again state the fact that the correlation between the main two pairs is now low, and the pound sterling continues to experience pressure on itself due to the sheer uncertainty of everything related to the Brexit theme. The day is coming when a vote on the Theresa May bill should take place, so the reluctance of traders to take risks before such an important event is very logical. Today in the UK are scheduled to publish reports on GDP and industrial production. Strong report values may not provide adequate support to the pound, but weak indicators may help the pair to gain a foothold below the moving average. In the States today, a report on the consumer price index for December will be released, and with him everything is the same. A strong report and the dollar is likely to rise in price. Weak data can be ignored. From a technical point of view, the growth potential of the British currency is also limited, at the moment, the level of 1.2800. Therefore, it remains only to wait for the pair to fix below the moving average or, conversely, above the level of 1.2800.

Nearest support levels:

S1 – 1.2756

S2 – 1.2695

S3 – 1.2634

Nearest resistance levels:

R1 – 1.2817

Trading recommendations:

The currency pair GBP / USD is adjusted. New long positions can be opened with targets between the levels of 1.2800 and 1.2817, if the Heikin Ashi indicator turns up. Above the moving average, the weak uptrend of the instrument remains.

Sell positions should be considered after the price is fixed below the moving average line. In this case, the initiative on the instrument will go into the hands of bears, and the first target for short positions will be the Murray level of “7/8” – 1.2634.

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