GBP/USD - 4H.
As seen on the 4-hour chart, the GBP/USD pair performed a rebound from the correction level of 61.8% (1.2836), a reversal in favor of the English currency and began a new growth in the direction of the upper line of the downward trend corridor. It should be noted that the new version of the corridor is slightly different from the previous one, has the same slight downward slope, but at the same time more suitable for the definition of "lateral". Thus, traders are equally likely to expect a fall in the area of 1.2740 (the lower line of the corridor) or a rise in the area of 1.2960 (the upper line) in the coming days.
There was no information background for the pound-dollar pair on Monday. The current corridor perfectly reflects the mood of traders in the last month, or rather its absence. Despite the fact that the pound-dollar pair does not stand still, it has not been able to get out of the designated corridor for several weeks and, most likely, will not succeed until December 12.
Many traders, experts, and ordinary observers now believe that the main problem of the UK is the unfinished Brexit, that once the Conservative Party wins the election, Boris Johnson will withdraw the country from the European Union and all the troubles of the UK will end. However, I would like to remind you that Brexit is only the first step of the UK towards full independence. After the UK does leave the bloc, it has a long road to recovery, as life within the EU will end, all ties with EU countries will be severed, and trade will suffer the most. The country will begin a long and thorny path of concluding trade agreements with the same European Union, with America and other countries to re-establish trade. By the way, Boris Johnson on this issue takes exactly the same foolhardy-optimistic point of view, as throughout the period of the premiership in relation to Brexit. However, as we can see, he did not manage to implement Brexit quickly and easily, as he originally planned. Moreover, there is at least a 40% chance that Brexit will not take place in January. In 2018, the trade turnover between the EU and the UK exceeded 750 billion euros. All trade relations between foreign companies will have to be re-established, the transition period will last until the end of 2020, which means that the Johnson trade agreement and the EU must be settled by the end of next year, otherwise the transition period itself will have to be postponed.
At the same time, the EU has already warned London that its access to the European single market will depend directly on the extent to which Britain adheres to European rules and regulations. The UK does not agree with this wording and is going to conclude a free trade agreement in which there will be no place for European rules. London also wants an agreement with America, which opposes Brexit with the agreement. Donald Trump has already warned Boris Johnson that a trade agreement with the European Union would complicate the signing of a similar agreement with America. Thus, I believe that after Brexit, another interesting chapter in the life of the United Kingdom will begin, which can last for many years and will leave a noticeable mark on the economy of the country. By the way, if the UK does leave the EU, Scotland will do its best to leave the UK.
Forecast for GBP/USD and trading recommendations:
The pound-dollar pair stopped falling near the correction level of 61.8%. Thus, purchases, from my point of view, are expedient, but today I do not expect the pair above 1.2960. I recommend selling the pair on Tuesday if there is a consolidation under the correction level of 61.8% with a target of 1.2740.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
