GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD pair still performed a close under the corrective level of 23.6% (1.2293). Thus, the bullish divergence of the CCI indicator is canceled, which initially implied a small corrective growth and the fall of the pound/dollar pair can be continued towards the level of 1.2014. There are no new emerging divergences on October 1 in any indicator.
Boris Johnson stands firm on his original position: no postponement of Brexit, it should take place in any case on October 31, and whether it will be possible to negotiate a deal with the European Union or not, this is the second question. According to the latest information received, Boris Johnson is preparing a proposal to Brussels to replace the Backstop mechanism, which legally defines the relationship between Ireland and Northern Ireland after Brexit. The agreement that Boris Johnson wants to offer contains a clause that all 27 EU member states will not support the transfer of Brexit to January 31, 2020, as the British Parliament wants. That is Johnson offers his version of the deal to Brussels. Solving the issue of Backstop in exchange for implementing Brexit on time. If this deal suits the European Union, then the UK Parliament will be at a disadvantage and, most likely, will not be able to cancel Brexit, blocking it at the legislative level. After all, the condition of the law prohibiting Britain from leaving the EU "No Deal" will be fulfilled by Johnson, and the EU itself will refuse to postpone the exit date. Thus, it remains to wait for the moment when Johnson will send the document to the leaders of the EU and the reaction of all countries to it.
According to the assumptions of some politicians and experts, Johnson is going to offer Brussels to establish customs control points at a distance of 5-10 km from the actual border on the island of Ireland. It is difficult to say what will give the bifurcation of the border and its transfer to a distance of 5-10 km from the actual. However, Johnson sees this as a possible solution. Frankly, there are not so many alternatives and possible options. The EU will certainly consider this proposal, but will it suit the EU government?
In any case, such information brings Britain closer to Brexit, but not to the unambiguous Brexit "No Deal". Thus, the pound can stop falling in pair with the dollar, at least until the reaction of the European Union to the document is known.
The UK manufacturing PMI rose to 48.3 in September. The value is still below 50, but still, the growth of the index is noticeable and did not allow traders to continue selling the pound/dollar pair.
What to expect from the pound/dollar currency pair today?
The pound/dollar pair secured under the correction level of 23.6% (1.2293), but it is again uncertain. Thus, it is not a fact that the fall will continue, given the background information. I recommend waiting for the development of the situation, as in recent days, traders are confused.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
Forecast for GBP/USD and trading recommendations:
I do not recommend buying the pair soon, as the pair can now perform a maximum rollback to the top.
I recommend considering new sales of the pair with the target of 1.2014, if a more confident close is made under the level of 23.6%, with the stop-loss order above the level of 1.2308.
