GBP/USD - 4H.
On December 13, the GBP/USD pair performed a consolidation under the correction level of 100.0% (1.3378), which allows traders to count on a slight drop in quotations in the direction of the Fibo level of 76.4% (1.3044). The pair also made a return to the trend upward range, which is already formal - the quotes have already left its limits twice. Only the closing of the pound-dollar pair above the correction level of 100.0% will work again in favor of the "Briton" and the resumption of growth in the direction of the correction level of 161.8% (1.4258). But this option looks out of the realm of fiction. Today, the divergence is not observed in any indicator. The rebound from the bottom of the Fibo level of 100.0% will increase the chances of continuing the fall of the pair.
So, the election results are known and now Boris Johnson and his party have to complete what's the reason for the re-election to the Parliament. That is, to end Brexit and enable the country to finally live outside the European Union under new rules. A new vote in Parliament, according to representatives of the Conservative Party, will take place before October 25, thus, in January, the UK can put an end to the long process of severing ties with the EU. However, it is also time to remember that the UK has more than just Brexit.
Over the past few weeks (and possibly months), traders have diligently ignored all the economic reports from the UK and America, arguing that the election is a more important event. This is true, but now that the results are known and their consequences are clear, it is time to return to the usual nature of trade and start paying attention to economic reports. And there is something to pay attention to today. Just within an hour, the indices of business activity in the manufacturing and services sectors of Britain will be released. The first is expected to rise to 49.3 and the second - to 49.6. As you can see, both business activity indices are likely to remain below the mark of 50.0, at the same time, it is possible to exceed the predicted values with the approach close to the mark of 50.0. One way or another, the growth of business activity indicators is very necessary for the pound to stay at current levels, and not to collapse immediately down. After lunch, the same indices of business activity will be released in America. The services sector is even expected to increase slightly to 52.0. However, I believe that at least today, the pound will not be able to keep the level of demand for the past week. A correction is almost inevitable, even despite the potentially "good" performance of British business activity. Thus, today the "Briton" can become a hostage of the reverse situation from the one in which it was in recent weeks. If the levels of business activity will be below the expectations of traders, then the information background will coincide with the corrective mood of traders.
Forecast for GBP/USD and trading recommendations:
The pound-dollar pair performed consolidation under the Fibo level of 100.0% (1.3378). Since the election is over, the correction, which began on Friday, has every chance of continuing today. Thus, I recommend selling the pound-dollar pair with a target of 1.3044 and a stop-loss order above the level of 1.3378. I recommend buying a "Briton" no earlier than fixing quotes above the Fibo level of 100.0%.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
