The pound froze in anticipation of further developments. Before this it tried to make the last attempt to build on recent successes, but Boris Johnson was able to stop this fun unexpectedly. It all started with the queen's signing of the law prohibiting the secession from the European Union without a divorce agreement with Brussels. Then the British Parliament pushed up the pound, which rejected all the proposals of the prime minister, including the early elections. Indeed, now Boris Johnson is obliged to receive another delay from Europe, right up to January 31. So until he does, calling an early election will be premature. Boris Johnson himself is not eager to break his promises, and is determined to withdraw Britain from the European Union no later than October 31. And as soon as the showdown in the House of Commons came to an end, and MPs went on another vacation, which will last until October 14, Boris Johnson made a resounding statement that the deal would be concluded until October 18. Such harsh and loud words stopped the pound's growth, as they made it clear to everyone that even after such a crushing defeat, the prime minister does not intend to give up, and will fight to the last. So, we are waiting for quite a few exciting events. Anyway, it adds uncertainty, which investors fear like fire.
However, in general, no one paid attention to data on industrial production in the UK, the decline of which went from -0.6% to -0.9%. This can be attributed to positive statistics, since they predicted a deepening of the recession to -1.1%.
Industrial production growth rate (UK):
Nevertheless, in the near future, British politicians will not seriously muddy the waters, since the Parliament has gone on an extraordinary vacation, and Boris Johnson is unlikely to have time to agree on anything with someone. Moreover, he will now have to speak with Brussels, whose position is extremely simple - there will be no new agreement. A draft agreement approved by Europe already exists, and the UK either accepts it or leaves the European Union without a deal. So for now, politicians will be silent, which means there is an opportunity to pay attention to macroeconomic statistics. Moreover, data on the labor market will be published today in the UK. And although almost all indicators should remain unchanged, the growth rate of the average wage, excluding premiums, should slow down from 3.9% to 3.8%. If you add to this the obvious overbought pound, then this is a great reason for easy correction.
The GBP/USD pair, still managed to please speculators with market leaps, temporarily tossing the quote above the level of 1.2350, but in the end the bull's passion subsided and we are back below band level. Considering the trading chart in general terms, we see that the correction course, formed solely on the background of the information flow, is still preserved in the market, where the quotation not only rebounded from record lows, it overcame the peak of the previous correction.
It is likely to assume that if there is no pressure on the information flow, the quotation may take a sluggish fluctuation within the current values, where over time short positions will recover. The reverse picture is seen from the perspective of maintaining pressure in terms of background, but here it is necessary to wait for a clear consolidation of the price above 1.2380.
Concretizing all of the above into trading signals:
• Long positions, considered in case of price consolidation higher than 1.2380.
• Short positions are considered in the event of price consolidation lower than 1.2300.
From the point of view of a comprehensive indicator analysis, we see that against the background of jumps, the bulk of the indicators retain upward interest. In turn, the minute sections of the charts where the indicators are applied signal a slowdown and recovery attempts.
