4-hour timeframe
Amplitude of the last 5 days (high-low): 77p - 106p - 78p - 69p - 89p.
Average volatility over the past 5 days: 84p (average).
The GBP/USD currency pair continues to be traded inside the 200-point side channel and, as expected, having reached its upper boundary, began a round of downward movement. It's hard to say how strong this downward movement will be. Nevertheless, one cannot exclude the fact that the upward trend may nevertheless resume. However, until we confidently overcome the level of 1.3000, which is also a psychological mark, we still do not recommend seriously considering the further strengthening of the pound. Today, no economic news has been received from Great Britain, and all the news bulletins are full of the results of a new case study, in which more than 100,000 people took part and who predicted a confident victory for the Conservatives. So certain that the adoption of Brexit according to Boris Johnson's plan is almost a settled issue. However, we have already said that even this format and nature of the news now does not have the proper impact on the pound/dollar pair. We continue to believe that the fundamental data are now completely unimportant. The pound is in a flat, albeit in a very wide flat, as for a 4-hour timeframe, and until it gets out of it, it is not worth talking about any influence of the foundation on the technique. Thus, we still recommend either trading based on the side channel, that is, from the upper boundary to the lower and vice versa, or not trading the pair at all until the lateral movement is completed.
As for the opinion poll, which predicted a confident victory for the party of Johnson, its results, of course, can no longer be called inaccurate, since the study involved one or two thousand people, and as many as 100,000. According to the results of the study, 359 out of 650 seats will go to the Conservatives. This number is more than enough to make Johnson's deal "on his own" and end the three-year epic of divorce from the European Union. In 2017, a similar study accurately predicted the loss of a majority in Parliament by Conservatives led by Theresa May. Such a big advantage of the Conservatives is explained by the fact that many residents of Great Britain who initially voted for the Labour Party no longer share the position of Jeremy Corbyn's party regarding Brexit, or rather its complete absence. The "hard" stance of Johnson, but at the same time providing for an agreement with the European Union, that is, the "soft" version of Brexit, attracts the electorate much more. Thus, now it is indeed possible to announce the likelihood of Conservative victory in elections by a large margin of not less than 80%. This means that Brexit will still take place before January 31, 2020, UK Prime Minister Johnson will still win his first victory, and we will witness a new epic in which the UK will negotiate trade agreements with the United States and the European Union, which , according to many experts, they can drag out just like Brexit for many years. Thus, after the euphoria after the completion of the "divorce" from the EU, the pound may again experience harsh everyday life, as now the UK economy will have to face a long period of life without the European Union.
At the moment, the technical picture for the pound / dollar currency pair does not change at all, as traders continue to keep quotes inside the channel 1.2970 - 1.2780. Thus, now we expect a downward movement of 50-100 points, at least. The pair was also unable to overcome the resistance level of 1.2937 and rebounded from it, which is another factor in favor of a round of downward movement.
Trading recommendations:
GBP/USD resumed its downward movement as part of a sideways trend. Thus, traders are again encouraged to consider selling the pound while aiming for 1.2820, as the pound quotes rebounded from the level of 1.2937. Buying the pound/dollar pair is not yet recommended, as traders still can not overcome the strong resistance area of 1.2970 - 1.2780.
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 movement options:
Red and green arrows.
