4-hour timeframe
Technical data:
The upper channel of linear regression: direction-down.
The lower channel of linear regression: direction – up.
The moving average (20; smoothed) - sideways.
CCI: -93.6556
Well, what was expected and feared happened. British Prime Minister Boris Johnson asked Queen Elizabeth II to suspend Parliament until October 14. Given the fact that parliamentarians will leave the holidays on September 3, they will only have a few days to declare a vote of no confidence in Boris Johnson and to remove him from his post, or to pass a law prohibiting the country to leave the EU without agreements. In principle, such a move by Johnson was widely known, therefore it cannot be said that it was a surprise. Former Attorney General Dominic Grieve has already called it an "outrageous act." Johnson himself rejects accusations that the suspension of Parliament's work is connected with the impossibility of implementing a "tough" Brexit without such an act. Deputies who support Johnson's policy immediately draw attention to the fact that the pause in the work of Parliament will last until October 14, and not until 31, if the Prime Minister wanted to completely avoid the intervention of deputies in the implementation of the break with the EU. The pound immediately fell on this message, as the probability of Brexit without an agreement increased significantly.
The only person who can stop Johnson is Labor leader Jeremy Corbyn. Immediately after Johnson's appeal to the Queen, Corbyn said he was "shocked by the recklessness of the Johnson government, which is talking about sovereignty and at the same time trying to suspend parliament to avoid checking its plans for the reckless Brexit." Now Corbyn, as the leader of the opposition, has time until September 9-12 to collect the necessary number of votes in Parliament and declare a vote of no confidence in Johnson. He has already written a letter to Queen Elizabeth II, in which he harshly criticized the actions and policies of the incumbent Prime Minister. However, Corbyn was already late on this front, as the Queen had already given the "go-ahead" to stop the work of Parliament. Given her status, which does not allow her to interfere in politics, Elizabeth II simply approves all requests sent to her by the government (Boris Johnson). Thus, Corbyn and his team are not able to change the decision. Thus, the hostilities are transferred to Parliament, and we look forward to the resumption of its work after the summer holidays.
The pound/dollar pair fell to the moving average line but it has not been able to gain a firm foothold below it yet. Thus, there are still some chances for the growth of the British currency, but they are not high, as Johnson and his team are doing everything to ensure that the UK leaves the EU in time, which will entail terrible economic consequences.
Nearest support levels:
S1 – 1.2207
S2 – 1.2146
S3 – 1.2085
Nearest resistance levels:
R1 – 1.2268
R2 – 1.2329
Trading recommendations:
The GBP/USD pair keeps the upward trend. Thus, if a rebound from the moving midline occurs, then again it will be possible to consider the purchase of a pair of small lots with targets of 1.2268 and 1.2329. However, given the fundamental background, it is more preferable to resume a downward trend with the first targets of 1.2146 and 1.2085.
In addition to the technical picture, fundamental data and the time of their release should also be considered.
Explanation of the 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) – blue line on the price chart.
Murray levels – multi-colored horizontal stripes.
Heiken Ashi is an indicator that colors bars in blue or purple.
