4-hour timeframe

Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – down.

The moving average (20; smoothed) – down.

CCI: -95.8333

On Thursday, July 4, the pound/dollar currency pair continues to decline. Yesterday in the UK, business activity indices in the service sector and composite in the production sector were published. Both were worse than the forecasts. Thus, the next fall of the pound sterling is quite justified. We would like to draw traders' attention to the fact that the pound/dollar pair has come close to the semi-annual lows. That is, there was no super important news concerning Brexit in recent weeks, but even they were not needed for the pair to return to the lows for six months. We believe that this is another very strong factor in favor of the further fall of the pound. Prospects for the British currency now simply do not have as long as the fate of Brexit is not decided. If earlier (this has happened 4 or 5 times), the pound showed growth on the rumors about the positive outcome of the Brexit, which is partly offset by a total loss, now the traders have ceased to believe in unverified and unconfirmed information. The country is briskly walking in the direction of "hard" Brexit. And to be quite realistic, in the direction of a new transfer of Brexit for an indefinite period, as whatever the two candidates promised for the post of Prime Minister, any option of leaving the EU should be approved by the Parliament. And the Parliament does not like the "hard" scenario, as well as the "deal" of Theresa May.

Nearest support levels:

S1 – 1.2573

S2 – 1.2543

S3 – 1.2512

Nearest resistance levels:

R1 – 1.2604

R2 – 1.2634

R3 – 1.2665

Trading recommendations:

The GBP/USD pair continues its downward movement. Thus, it is recommended to continue to sell the pound sterling with the goals of 1.2543 and 1.2512 until the reversal of the Heiken Ashi indicator to the top.

It will be possible to buy the pound/dollar pair in small lots with the targets at 1.2665 and 1.2695 after the reverse consolidation of the price above the moving average. However, to do this, the bulls will need fundamental support, which will be extremely difficult to obtain.

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

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – 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.

Heiken Ashi is an indicator that colors bars in blue or purple.