4-hour timeframe

Amplitude of the last 5 days (high-low): 88p - 126p - 92p - 56p - 56p.

Average amplitude over the last 5 days: 84p (86p).

The GBP/USD pair's growth for today is a breath of fresh air for the pound. In fact, there is only one reason for the strengthening of the British currency - this is a strong UK retail sales report for July. In annual terms, the indicator grew by 3.3% with a forecast of +2.6%, in monthly terms it added 0.2% with market expectations of -0.2%. True, the effect of a strong report was slightly offset by a similar report from the US, where real values also exceeded forecasts, but nonetheless. For the pound, now and such a growth - for happiness. There is a second factor that partially offset the strength of the retail sales report. Most Britons have been actively preparing for the "hard" Brexit over the past two months, buying up food, medicine, and essentials. This explains the growth in sales, which turns out to be partly artificial. Well, the pound's current growth only looks like a small timeout. The most interesting thing in the UK will begin in two weeks, when MPs will return from the summer holidays and Parliament will resume work. The Brexit procedure will again enter the active phase and a confrontation between Jeremy Corbyn and Boris Johnson will begin in the government. We already wrote earlier that the Labour leader openly expresses resistance to the hard Brexit and, accordingly, to Prime Minister Johnson. Corbyn openly declares his desire to declare a vote of no confidence in Johnson, but he should be supported by Parliament. All these political wars will begin in September, exactly 2 months before the official date for the United Kingdom to leave the EU. Actually, the main question now is whether the Parliament will be able to resist the initiatives of Boris Johnson and save the country from a disordered Brexit? Would it like to? Brexit cannot last forever, the government has shown a surprising inability to work together and produce results in the last year. Meanwhile, every additional month of delay brings Britain closer to a crisis, from which the country will recover more than a year. Well, the number of possible options for what will happen in the next two months is huge: starting from the Parliamentary elections, the resignation of Boris Johnson, ending with a new postponement of Brexit. On the technical side, it's too early for bulls to celebrate the victory. The pound has grown by only 75 points, but these points can be the beginning of an upward correction, which can be saving and give a respite for a couple of weeks. In general, the pound continues to remain near record lows.

Trading recommendations:

The GBP/USD currency pair has started an upward correction. Thus, long positions are formally relevant now with targets at resistance levels of 1.2147 and 1.2192, however, transaction volumes should be minimal. It's best not to take any chances and generally refuse to buy the British pound, no matter how attractive the current levels may seem. It is not known how Brexit will end. It is possible that in two and a half months we will catch the pound at parity with the US dollar.

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

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.