4-hour timeframe
Technical data:
The upper channel of linear regression: direction – up.
The lower channel of linear regression: direction – sideways.
The moving average (20; smoothed) – up.
CCI: 128.4760
The British pound rose to the Murray level of "+1/8" - 1.2970, near which the bulls ended the hike up last time. A few dozen points above, the bulls hike up even earlier. Thus, we believe that it will be quite difficult for traders to overcome the resistance area of 1.2970-1.3010. Moreover, the British currency still has no fundamental support. That is why we continue to believe that the pound will not rise in price until the date of the UK election, that is, until December 12, simply based on the positive expectations of traders. Theoretically, of course, this is possible, and we recommend trading following the technical picture, which signals an upward trend now. However, it is also worth keeping in mind the possible option of a new fall in the British currency.
We can say that Boris Johnson won his first victory in the election of Prime Minister, the results of which were summed up on July 24 this year. But then he was not yet the prime minister, but only took this post. This was followed by a series of high-profile defeats, including the prorogation of parliament, which was canceled by the court, and several parliamentary blocking of Boris Johnson's proposals to hold early elections and support his "deal" with the European Union, and, like the apotheosis of his prime minister's career, another Brexit transfer. Thus, in almost three months of reign, Boris Johnson did not win a single victory. Of course, it can be said that Teresa May is to some extent guilty of this, who also held early elections to improve the influence of conservatives in Parliament and to push her "deal" with the EU. As a result, she only worsened the position of the Tories. However, we also recall that in almost all parliamentary votes, Boris Johnson's initiatives lacked a sufficiently large number of votes for approval, rather than 5-10. And the Prime Minister decides to hold new re-elections for the same purpose that Theresa May conducted them. And what will come of it, we will learn on December 12. So far, all periodicals continue to be full of headlines about the "high political ratings" of conservatives, the highest since 2017. However, from our point of view, this is some kind of weak record – to have maximum ratings in two years. Not for twenty-two. Yes, according to analytical agencies, the Conservative Party rating now reaches 45%, however, as we have said more than once, this does not mean at all that conservatives will get 45% of the seats in Parliament. Moreover, it should be understood that a strong preponderance of conservatives cannot be a priori. For example, Scotland, with almost all of its members voting for Brexit, is likely to support the Scottish National Party, which wants to remain in the EU and leave Britain. Labor will not remain without support, and they will take 25% of the seats in Parliament. The Brexit party, which was formed just when conservatives and Labor could not deal with the "divorce" from the EU, will also collect its 10%, or maybe 15%. And there are also other political forces, non-factional deputies. Like it or not, it's unlikely that the party of Boris Johnson will collect more than 40% of parliamentary mandates. However, if nevertheless, the conservatives manage to form the ruling majority, this will be considered the first real victory of Boris Johnson and, accordingly, will increase the likelihood of Brexit realization on January 31 to almost 100%.
From a technical point of view, we expect a reversal of the pound/dollar pair down near the current resistance levels. Macroeconomic publications are not planned for today either in America or in Albion. Thus, traders will not have a fundamental economic background today.
Nearest support levels:
S1 – 1.2939
S2 – 1.2909
S3 – 1.2878
Nearest resistance levels:
R1 – 1.2970
R2 – 1.3000
Trading recommendations:
The GBP/USD currency pair continues its weak upward movement. Given that traders are practically not responding to fundamental data, and there are no data on the first two trading days of the week, volatility is unlikely to increase today, and the pound/dollar pair may well return to the flat. However, now you can still consider buying the pound with targets at 1.2970 and 1.3000, however, a downward turn is very likely near these levels.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustrations:
The upper channel of linear regression – the blue line of the unidirectional movement.
The lower channel of linear regression – the purple line of the unidirectional movement.
CCI – the blue line in the regression window of the indicator.
The moving average (20; smoothed) – the blue line on the price chart.
Support and resistance – the red horizontal lines.
Heiken Ashi – an indicator that colors bars in blue or purple.
Possible variants of the price movement:
Red and green arrows.
