4-hour timeframe
Amplitude of the last 5 days (high-low): 100p - 78p - 134p - 60p - 86p.
Average volatility over the past 5 days: 92p (high).
On the first trading day of the new week and month, September 2, the British pound fell under another wave of mass sales. In less than a day, the British currency has already lost about 120 points and is not going to stop there. The reasons for this collapse lie in the sharply increased chances of Brexit without any agreement. As we all know, MPs will leave their holiday tomorrow and they will have exactly 6 days to pass the bill that blocks "hard" Brexit, or to cancel Boris Johnson's decision to suspend the Parliament, recognizing it as illegitimate. Both issues can be resolved tomorrow, since it is on Tuesday that the first parliamentary meeting will be held and hearings will be held on the suspension of the work of the British Parliament for the period from September 9 to October 14.
Labour and opposition leader Jeremy Corbyn said Monday that in the next 28 hours it will become known what exactly will be proposed to the deputies in Parliament in order to prevent Brexit, which is destructive for the country. Jeremy Corbyn also said that "if it's not possible to take effective measures to prevent leaving the EU without a deal this week, then the probability of a Brexit on October 31 will be 100%." It was against the backdrop of this statement that the pound, most likely, went to the next steep trough. The opposition leader also said the hard Brexit "will ruin our economy." "Johnson and his team do not think about the consequences of such a move," summed up Corbyn. Well, if we add to this the declining index of business activity in the UK manufacturing sector, it becomes clear why the pound ends the first day of the week in a deep negative. Macroeconomic statistics continue to disappoint, and by the end of this week, it will become absolutely clear whether Britain will leave Brussels's jurisdiction without any agreement or if there will still be any hope of an orderly "divorce." Since there is no optimistic information about this so far, the bears continue to "crush" the pound. And the situation is unlikely to change until encouraging news arrives from Parliament. But whether they will arrive at all is a big question. One way or another, tomorrow it is recommended to closely monitor any news from the UK. Sharp price reversals, strong movements, high volatility are possible.
Based on the technical picture, the pound/dollar continues to move steadily down and there is no reason to expect at least a correction now. However, fundamental events tomorrow can greatly affect the technical picture. You need to be prepared for this.
Trading recommendations:
The GBP/USD currency pair continues its downward movement. Therefore, it is recommended to sell the pound with targets at support levels of 1.2032 and 1.1969. Increased caution is required in trading tomorrow, as news will come from the Scottish Court and the British Parliament throughout the day.
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.
