4-hour timeframe
Amplitude of the last 5 days (high-low): 151p - 73p - 58p - 84p - 178p.
Average volatility over the past 5 days: 109p (high).
Monday, September 16, for the GBP/USD pair is also quite interesting, however, in terms of the information received, and not the movements of the pair itself. The currency pair is corrected to the Kijun-sen critical line, which we warned about in the morning. But the information from Luxembourg, where today, at a business lunch, the prospects of Brexit were discussed by the head of the European Commission, Jean-Claude Juncker and British Prime Minister Boris Johnson, makes traders think and analyze the data.
Immediately after lunch, representatives of the European Commission stated that "there have been no proposals from the government of Boris Johnson regarding the solution of the issue of backstop." It was also emphasized "the desire of Jean-Claude Juncker to consider any proposals in order to overcome the crisis and reach an agreement." In turn, Boris Johnson told Juncker that he did not intend to ask the European Union for a postponement at the summit on October 17-18. On Monday (and once again) Johnson said that "Great Britain will leave the EU on October 31 with or without a deal." What does all this mean in the context of the adopted bill on the impossibility of implementing a "hard" Brexit without the consent of Parliament? There are two options: either Boris Johnson found loopholes in UK law that would allow him to bypass the Parliament's ban and not be punished for it, or Boris Johnson was bluffing before Brussels, forcing the European Union to be more accommodating and compliant in the negotiation process. We believe that the first option is unlikely, and the second will not give the necessary result. Given the fact that Boris Johnson, in the manner of conducting foreign economic policy, is very similar to US President Donald Trump, who often changes his mind, declares contradictory things and is famous for unexpected and extraordinary actions, then you can expect similar "feints" from the UK prime minister. By the way, the opposition, led by Jeremy Corbyn, is silent and does not comment on the recent events.
Well, traders can only wait for new information, new speeches by the first politicians of the United Kingdom and concrete advancements in the Brexit procedure or negotiations on Brexit between Brussels and London, if any. The pound is still in a good mood amid five defeats by Boris Johnson, which significantly reduced the likelihood of a hard Brexit at the end of October, but if the new information really indicates that Johnson intends to ignore the resolution of the Parliament, it will again bring the country closer to an exit without a "deal", and the pound may once again go down.
A meeting will be held in the Supreme Court of Great Britain tomorrow, which will consider the case of the unlawful prosecution of Parliament. If, as many analysts and traders expect, the court will decide Johnson's decision to send deputies on leave for 5 weeks illegally, then MPs will be able to return to their work in the coming days and continue the war against Boris Johnson on the sidelines of the Parliament.
Technically, we expect a price rebound from the Kijun-sen line and the resumption of an upward trend. Overcoming the Kijun-sen line by the bears will change the current downward trend.
Trading recommendations:
The pound/dollar currency pair began to adjust. If the bulls manage to keep the pair above the critical line, it is recommended to buy the pound again with targets at 1.2528 and 1.2590. Consolidating the price below the critical line will allow us to consider selling while aiming for 1.2319 and the lower boundary of the Ichimoku cloud - Senkou Span B. line
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
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.
