4-hour timeframe
Amplitude of the last 5 days (high-low): 139p - 80p - 161p - 59p - 64p.
Average volatility over the past 5 days: 101p (high).
Tuesday, October 29, is also a quiet trading day with low volatility for the GBP/USD pair, as well as for EUR/USD. By and large, nothing interesting can be said about today. The British currency surprisingly stopped responding to any messages regarding Brexit, or traders felt that the most important thing was that Brexit is postponed. Anyway, following a strong growth of 800 points last week, the pound/dollar currency pair is practically immobilized, of course, within its average volatility, which remains quite high. There have been no macroeconomic publications today, and they have not been observed for a week and a half in the UK.
Well, the hit parade of the latest news on the topic of Brexit looks something like this:
1) Boris Johnson initiated a vote in the Parliament on December 12th. Parliament rejected the proposal by the prime minister.
2) The European Union officially gave the UK a postponement until January 31, 2020, with the possibility of early release on the 1st day of each month, if Parliament suddenly decides to agree to a deal. Boris Johnson agreed with the postponement and reluctantly announced the delay.
3) The Labour Party, led by Jeremy Corbyn, announced their agreement to hold elections on December 12, because now, according to them, the risk of implementing a "hard" Brexit is reduced to zero.
Therefore, a new vote could be held for holding early elections in the Parliament today, which from the fourth attempt can be approved by the majority of MPs. However, an extremely important question now arises which cannot be left out in this article. As we said earlier, Labour needs either an election victory or an increase in its own strength in Parliament with a simultaneous decrease in the strength of Conservatives. Otherwise, the hard Brexit will loom again on the horizon. That is why Boris Johnson initiates the elections in order to win a more convincing victory than Theresa May. In the future, Johnson expects that he will have enough votes to realize any Brexit, including the hard one, if something does not work out with the deal again. And if Labor agreed to the election, how do they expect to achieve their goals? The answer to this question came very recently. According to British law, the definition of the "election" procedure is not in itself unshakable. That is, its order, electorate and various aspects can change from time to time. Roughly speaking, the Labour Party, through the same voting in the Parliament, can amend its process. According to the latest information, the Laborites want to change the minimum age of the electorate from 18 to 16 years, as well as allow citizens of other countries residing in the European Union to vote. Of course, it is precisely in these two potential changes that the intention of the main opposition party lies. Potentially, we are talking about several million additional voters, who, for the most part, should be against Brexit, and therefore against Boris Johnson and the Conservatives. As for the Europeans living in the UK, nearly everyone would not vote for the Conservative Party. Thus, now the Parliament will have to discuss the entire election procedure, as well as vote on the aspects proposed by the Labor Party. If they are approved, then Boris Johnson and his party can get the opposite of the effect they expected. Well, the whole Brexit process, in case the Laborites win the election, can result in either holding a second referendum, or it could go on for many more years, since those who are against and the opposition are not of the same opinion as the ruling party.
There's nothing to talk about right now from a technical point of view. The pound/dollar is trading inside the Ichimoku cloud, right next to the Kijun-sen line. Bollinger Bands narrowed to a low, indicating a strong fall in volatility and the absence of a trend. The main hopes are now connected with the fundamental events of tomorrow. In the current conditions, it is impractical to conduct trade.
Trading recommendations:
GBP/USD pair is part of the lateral correction. Thus, sales of the British currency with the target of 1.2757 are formally relevant now, however the "dead cross" is very weak, the trend for the pair is absent even in the context of intraday trading, and the price is inside the Ichimoku cloud. Thus, we recommend that you wait until the situation is clarified, the flat is completed and the pair leaves the Ichimoku cloud, as well as the results of the Fed meeting and Jerome Powell's press conference.
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.
Support / Resistance Classic Levels:
Red and gray dotted lines with price symbols.
Pivot Level:
Yellow solid line.
Volatility Support / Resistance Levels:
Gray dotted lines without price designations.
Possible price movements:
Red and green arrows.
