The Brexit situation continues to throw the pound from side to side. At first, the pound slightly grew, since no one believed that the House of Commons would approve Prime Minister Boris Johnson's completely insane idea, a bill to protect the internal market. After all, this bill itself, in fact, violates signed agreements. But that was not the case. The House of Commons approved this bill, with a rather impressive majority. So far, it is only in its first reading. That is, in principle, the legislators agree with the idea itself. Afterwards, the pound noticeably went down. Whatever one may say, but such actions cast doubt on the theoretical possibility that the UK and the European Union will be able to come to at least some kind of agreement. This means that Brexit will follow the hardest scenario. That is, without a deal. And the UK is the one that will suffer the most from this. It is believed that the EU will only benefit from this.
But even without that, things are not going well in the UK. This is colorfully evidenced by the latest report on the UK labor market. The unemployment rate itself, as expected, rose from 3.9% to 4.1%. However, there are a lot of questions about this indicator, especially in Great Britain itself. There is a persistent feeling that British statistics on this issue do not reflect the full picture. So other indicators are of much greater interest, which by no means shine. The number of applications for unemployment benefits increased by 73,700, instead of the expected 51,000. However, in a strange way, employment decreased by only 12,000. Although, according to forecasts, it should have decreased by 120,000. Also, in some incomprehensible way, the decline in average wages, by -0.2%, was replaced by an increase of 0.2%. Taking into account overtime, the rate of decline in average wages slowed down from -1.2% to -1.0%. That is, if you believe this data, then only employees with the lowest wages are dismissed in the UK. And the discrepancy between claims for benefits and changes in employment is also surprising. In general, over the past few months, the British labor market data does not even fit with common sense. Which also frightens investors.
Employment Change (UK):
However, this has not affected the pound yet, since investors are waiting for the results of the second vote in the House of Commons. If MPs pass the law on the bill's second reading, and even without fundamental changes, the pound will continue to lose ground. And judging by how the votes were distributed yesterday, the likelihood of such a development of events is very, very high. The pound's fate depends on what happens today in the House of Commons.
The GBPUSD pair is facing a large-scale decline of more than 700 points, where the role of support was played by the 1.2770 level, relative to which there was a correction in the direction of 1.2920. The shaky situation with the pound does not allow buyers to return to the market in full force, and the oversold stage is clearly visible on technical indicators.
If we proceed from the quote's current position, then we can see the price moving within the 1.2885 level.
Regarding volatility, a high rate of dynamics is recorded here on a stable basis, which is confirmed by speculative procedures.
Considering the trading chart in general terms, the daily period, you can see that the market is trying to change the medium-term upward trend, but no fundamental changes are recorded.
We can assume that the pound will remain under pressure, and we do not exclude the possibility of moving towards the 1.2770 level. At the same time, since the price has not settled below 1.2840, one should not exclude the alternating range within the values of 1.2850/1.2915.
From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments on the minute and hourly intervals signal a buy, due to the price rebounding from the 1.2770 level. The daily period, as before, is focused on selling, since the pound has started to weaken since September 1.
