4-hour timeframe

Amplitude of the last 5 days (high-low): 264p - 298p - 134p - 198p - 221p.

Average volatility over the past 5 days: 223p (high).

The pound soared to the level of 1.3000 during the first half of the penultimate trading day of the week, missing it by only 10 points. The total growth of the British currency over the past 6 days amounted to almost 800 points. The average volatility of the pair is 223 points per day. Today at the European Union summit, it was officially announced that an agreement between London and Brussels has been reached. Boris Johnson immediately wrote about it on Twitter:

"We got a great deal that takes control back. Parliament should now complete Brexit on Saturday so that we can move on to other issues such as the cost of living, health, violent crime, and the environment."

A little later, similar messages came from representatives of the European Union. European Commission President Jean-Claude Juncker wrote:

"Where there is a will, there is a deal. And we have it. This is an honest and balanced agreement for both the EU and Britain, in line with our commitment to finding a solution. I recommend that the EU Council approve this agreement."

Well, French President Emmanuel Macron simply welcomed the agreement but called for "being careful" before being ratified by the parliaments of Great Britain and the European Union.

Meanwhile, the leader of the Opposition and the Labor Party, Jeremy Corbyn, believes that the current version of the agreement is even worse than was reached by Theresa May. According to Corbyn, "this is a corrupt and unacceptable agreement that needs to be rejected." The Labor leader believes that this version of the "deal" endangers the food security of the Kingdom and jeopardizes the British health care system. Corbyn also reiterated that the only way out of this situation is a second referendum. Now, indeed, everything will depend on the deputies, among whom the Laborites, who have long been skeptical of the figure of Boris Johnson, his politics and manner of doing business, occupy a considerable share. Thus, it is not necessary to count on the support of Labor on the ballot. Conservative forces are not enough to ratify the deal, which means that the fate of Brexit will be decided by third-party and smaller parties. In particular, representatives of the Democratic Unionist Party announced in the morning that their terms of the agreement also did not suit them and they would not vote for him. However, it is difficult to say how many votes the "Boris Johnson deal" will eventually collect. So far, the pound has pulled back from local highs, it seems that due to information about a possible new rejection of the Brexit deal. We recommend that traders continue not to risk in vain and not try to guess how the meeting of the Kingdom Parliament will end on Saturday. Moreover, the Forex currency market will still be closed.

From a technical point of view, traders were not able to overcome the first resistance level of 1.2841, so now a downward correction and the completion of an uptrend are possible. The pound has grown quite a lot this week and has fully worked out information about the conclusion of an agreement between London and Brussels. He worked in advance and with interest. Now we need to wait for the decision of the British deputies. The ratification of the document is a further growth of the British pound. Rejection - pound will return to a downward rally.

Trading recommendations:

The pound/dollar currency pair can be said to have started to adjust, as the level of 1.2841 remains unstoppable. Thus, the consolidation of bulls above this level can be considered a new signal to buy with a target of 1.3029. But we still recommend trading the pair extremely cautiously, especially in the run-up to the meeting of the UK Parliament, on which the fate of Brexit will now depend.

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 – red line.

Kijun-Sen – blue line.

Senkou Span A – a light brown dotted line.

Senkou Span B – light purple dotted line.

Chinkou Span – green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD:

The red line and the histogram with white bars in the indicators' window.