The beginning of the week was extremely dramatic for the pound. It cost EU chief negotiator Michel Barnier to declare that he sees no prospects for reaching at least some kind of agreement between London and Brussels, in fact, it sent the pound into free fall. But in the end, everything went well for the pound, as it was able to fully recoup this rapid decline. And just as good. However, this required Prime Minister Boris Johnson's intervention, who is traveling to Brussels today to meet with President of the European Commision Ursula von der Leyen. At the same time, there is a high probability that Johnson may still meet with German Chancellor Angela Merkel and French President Emmanuel Macron. Moreover, there are rumors that Johnson is ready to abandon his brainchild in the form of the UK Internal Market Bill, which became another stumbling block at one point, and at some point Brussels had to make serious concessions to London. The European Union agreed not to consider this issue during the negotiations, hoping that if a trade deal is signed, London will not have a reason to apply a law that contradicts international norms and agreements already reached. And all these statements, rumors and actions were enough for the pound to win back all its losses. In any case, the pound will clearly be influenced solely by the course of negotiations and the statements of various politicians. And, at least within the next two days. According to Barnier, the deadline is Wednesday, since the summit of the EU countries starts on Thursday, during which the issue of Europe's adoption of a trade agreement with the UK should be considered. But if the agreement itself does not exist, then there is nothing to accept. In general, we are closely following the progress of Johnson's talks with the heads of the European Union.
During the high activity, the GBPUSD pair fell to the 1.3223 area, where there was a slowdown and, as a result, a recovery of almost 100% against the morning decline. The resistance level, as before, is the 1.3400 coordinate, where the quote turned up during the recovery process.
As for volatility, one of the highest indicators was observed the previous day, more than 200 points, which indicates an increased interest from speculators.
Based on the quote's current location, you can see the process of stagnation within the values of 1.3340/1.3365.
Looking at the trading chart in general terms, the daily period, you can see signs of correction relative to the inertial upward move.
We can assume that stagnation in a range of 25 points will end any minute, but the main movements, as before, will depend on the incoming information on Brexit.
If we proceed from price levels, then the values of 1.3340 and 1.3400 can be used, depending on price taking beyond them, then you can make a deal.
Buy higher than 1.3400.
Sell lower than 1.3340.
From the point of view of complex indicator analysis, we have a versatile signal. So, technical instruments on an hourly period have a tendency to show sell, and the daily interval holds a buy signal due to an upward trend.
