Honestly, by all the laws of the genre, the pound should have opened with a strong gap today, and down. After all, the House of Commons rejected Boris Johnson's proposed version of the divorce deal, which the European Union adopted quite quickly. This is the fourth version of the deal with the European Union, which is rejected by British MPs. As always, the stumbling block is the border between Ireland and Northern Ireland. This is an issue that cannot be resolved, and one gets the feeling that it has no solution at all. Whatever you propose, it still will not suit either one or the other half of the MPs. Despite this, the pound opened at the same values at which it ended the previous week. The reason lies in the fact that although the House of Commons rejected the new version of the divorce deal, all the same, MPs left open a window of opportunity, and it is possible that this deal will eventually be adopted. The MPs demanded first to adopt a number of laws that are designed to smooth out the negative aspects present in the rejected version of the deal. Boris Johnson immediately vowed to put them all to a vote, within a week, so that he would not have to ask the European Union for another delay. The prime minister was still forced to write a letter to Donald Tusk, asking him to consider the possibility of providing the UK with another delay until the end of this year. The President of the European Council, almost immediately, officially announced that he would submit this issue to the heads of EU countries. Although he recently claimed that the whole story was too long, and it was time to finish it. So this allows us to conclude that, if necessary, the UK will receive another postponement, which reduces the risk of unregulated Brexit. This is precisely what caused the pound to not instantly collapse. Nevertheless, after the quite optimistic conclusion of the past week, when negotiations were resumed in a short time, and a new version of the deal was drawn up, the situation again became completely uncertain, which would seriously put pressure on the pound.
The GBP/USD pair ended the week with another rapprochement with the key psychological level of 1.3000, where it felt resistance and conditionally stopped. In fact, we saw another bullish interest on expectations, which provoked a stream of long positions, but in the end the miracle did not happen.Considering the trading chart in general terms, we see a vertical move of more than 780 points, where this overbought is not just a word, a fact of what is happening.
It is likely to assume that the pound/dollar pair on the same emotions will try to pull back towards the previously passed mark of 1.2770. At the same time, no one misses the dense information background, which will continue to torment the British currency, then up, then down.
Concretizing all of the above into trading signals:
- Long positions are considered in case of consolidating the price above the psychological level of 1.3000.
- Short positions are considered in case of a correction towards the level of 1.2770.
From the point of view of complex indicator analysis, we see that the main array of indicators signals a further upward trend, which reflects the overall background of the market. Short-term indicators focus on the existing pullback, signaling sales.
