Despite the almost bare economic calendar, all the attention of investors on forex is focused on the British pound. According to Mark Carney, Great Britain marked the beginning of global uncertainty in 2016, which slowed business activity and GDP in most countries of the world. It can put an end to this by voting for a draft dissolution agreement with the EU. Boris Johnson also called for support of the document, arguing that any delay would harm the interests of the United Kingdom, its EU partners and relations between them. However, the British Parliament may have a different opinion.

The sterling has not responded to macro statistics for a long time and is calling for political news. In this regard, an increase in unemployment from 3.8% to 3.9% and disappointing inflation statistics (fact +1.7%, forecast + 1.8% YOY) remained almost unnoticed by investors. All their attention has shifted to Brexit. The prime minister of Great Britain managed to find a common language with the EU. Now he needs 320 votes in Parliament to enter, and not get into the story. In fact, the head of the Cabinet of Ministers needs to lure 61 opponents to his side, which does not seem unrealistic.

According to Goldman Sachs, the chance of a disorderly Brexit dropped to 5%. This circumstance makes the correction potential of GBP/USD limited. MUFG expects the pound to find haven in the range of $1.3-1.35 if lawmakers approve the deal. UBS Global Wealth Management also talks about the $1.35 level. TD-Bank believes that the pair is able to rewrite the May high near 1.3185, however, the contract rejected by the Parliament will trigger a wave of correction to 1.264-1.266. Robobank sees an even deeper low at around 1.22.

Pound Forecasts

The fact that the bulls continue to dominate the market was shown by the sterling reaction to the decision of MPs to vote for the proposal to postpone the approval of the deal. As a result, Boris Johnson, in order to obey the law, was forced to write a letter to the EU asking that they prolong the transition period. The prime minister did not sign this document and sent another to Donald Tusk, in which he expressed confidence that Britain would leave the EU on October 31. The opposition party believes that the head of the Cabinet of Ministers behaves childishly and threatens him with court in the event of a disorderly Brexit.

In my opinion, everything goes to the point that the deal will be approved by the British Parliament on the falling flag. The bulls on GBP/USD believe this, pushing the pair to the psychologically important mark of 1.3. The fact that they managed to gain a foothold above 1.29 indicates the seriousness of the intentions of sterling buyers.

Technically, after a clear combination of patterns "Shark" and 5-0, the upward trend of the analyzed pair is directed to the target of 261.8% on the AB = CD model. It is located near 1.309. A necessary condition for maintaining control over the pound by the bulls and continuing the rally is to consolidate GBP/USD quotes above the Pivot level of 1.29.