4-hour timeframe

The amplitude of the last 5 days (high-low): 97p - 64p - 86p - 42p - 129p.

Average amplitude for the last 5 days: 84p (72p).

The pound sterling, after a correction to the critical line, based perhaps on the assumption of Theresa May holding a second referendum, very quickly resumed the downward trend. As it turned out, the "second referendum" statement was no more than the prime minister's trick in another attempt to once again push her Brexit deal through Parliament. Therefore, the forex market's optimism was immediately offset. Today, a report on inflation was published in the UK, and it turned out that the consumer price index accelerated to 2.1% in April, but turned out to be lower than the forecast value. Therefore, traders received a new reason to sell the pound and rushed to open new short positions. Next, Theresa May will most likely retire within a few months, and tomorrow the elections to the European Parliament will start, in which the United Kingdom will take part. According to many experts, the victory in this election from the UK will be won not by the Labour Party and the Conservatives, but by the Brexit party headed by Nigel Faraj, who was the initiator of Brexit. By and large, for the pound it does not matter who wins the elections to the European Parliament. The pound is only interested in the political situation inside the country and the question of when the Brexit procedure will end at least somehow. Any decision of the Parliament is required - whether it is a rejection of Brexit or a "hard" scenario. In any other case, the pound will be prone to falling further. The resignation of Theresa May can have a positive impact on the pound, but it is unlikely for a long period of time, since all the problems of the country will remain in place until the new prime minister resolves them.

Trading recommendations:

The GBP/USD currency pair resumed its downward movement. Therefore, it is now recommended that you re-consider in selling the pound sterling with target support levels of 1,2604 and 1,2565.

Buy orders could be considered in small lots only when the price has consolidated above the Kijun-sen line with a first target of the Senkou span B. The mood on the GBP/USD currency pair remains frankly bearish.

In addition to the technical picture 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.