The pound/dollar pair continues to trade in a downward direction on the hourly chart on April 27. The quotes of the GBP/USD pair were pinned below the upward trend line last Friday, which made it possible for us to assume that both the downward movement and trend would continue. However, instead, the pair slightly grew and worked out the Kijun-sen line for the 4-hour timeframe and got close to the downward trend line, which is stronger and long-term. Thus, as in the case of the euro, we are waiting for either a downward turn or a break in the trend line in this area, which will determine the pair’s trend for the next few days.
There were no statistics from the UK last week. Nor will it be this trading week, except for the only report on business activity in the manufacturing sector on Friday. Thus, focus will be on overseas data, which you won’t find in the first two trading days of the week. Trading can be quite calm on Monday and Tuesday. Even a flat is possible. In general, it is not possible to say that one of the currencies is advantageous than the other. The US dollar sharply grew in the period of March 9-19, but the pound sterling subsequently recovered by 70%. Now, we can say that the future fate of the pair is being decided both in the long term and in the medium term. Thus, on April 27, we also have three possible scenarios for the development of the event, two of which involve specific trading signals:
1) The initiative for the GBP/USD pair remains in the hands of sellers, as the price continues to be below the downward trend. Therefore, we expect a clear rebound from this line today with the subsequent resumption of the downward movement. In this case, we recommend selling the pound with a view to the support level of 1.2240 at the 4-hour timeframe, near which it will be possible to take profits. Potential to Take Profit – 110 points.
2) Buyers can expect to open trading deals if the pair consolidates above the downward trend. This should be an eloquent and clear overcoming, unambiguous. In this case, we recommend buying the pound/dollar pair with the goal of the Senkou Span B line – 1.2467 with an intermediate target near the level of 1.2416, from which the price previously rebounded several times from above, and now can rebound from below. In this case, you can Take Profit from 30 to 80 points.
3) The third option does not imply opening new deals – if quotes smoothly continue to move along the Kijun-sen line and overcome the trend line by moving sideways. In this case, flat and do not open new positions.
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