4-hour timeframe

Technical data:

The upper channel of linear regression: direction – down.

The lower channel of linear regression: direction – up.

The moving average (20; smoothed) – up.

CCI: 185.6498

Last week, the pound ended with a strong growth, which was not fundamentally justified. On Friday, there were no macroeconomic publications in the UK, and in the States, macroeconomic reports were in favor of the dollar. Moreover, there were no new reports on Brexit or Prime Minister Johnson's speeches. Thus, we tend to assume that the bulls finally felt the opportunity to develop success. However, their arrogance may soon be brought down by the same Boris Johnson. His latest statements say that the British Prime Minister is also set to implement Brexit until October 31 with or without a "deal". Now, Johnson explains his demarche by saying that he will make every effort in negotiations with the European Union to reach an agreement, however, if the consensus does not work out, then the UK should leave the EU without postponing Brexit deadlines. For the sake of this, Johnson is even ready to violate the instructions of the Parliament, that is, the law.

Thus, before the summit on October 17-18, at which Brexit's fate should be decided in terms of either it will be postponed or carried out on October 31, Johnson, in theory, should try to agree with the EU leaders. Informal dinner with Jean-Claude Juncker will be held today to discuss Brexit issues, but we still believe that the parties are too far from common opinion, so we will not be able to agree in less than a month. By and large, only one question remains open – the question of the border between Ireland and Northern Ireland. The parties cannot offer an alternative "backstop" mechanism. And it is on this issue that Johnson, unexpectedly for everyone, notes significant progress in the negotiations, and the European Union, a little later, denies any progress. Why would the EU deny progress in the negotiations, if it is? No reason. Accordingly, we are inclined to believe that there is no progress and Jeremy Corbyn was right when he said that in principle there are no negotiations on the Brexit agreement, there is only the appearance of these negotiations. Johnson needs to calm the electorate and the deputies to avoid new political demarches and public unrest. It is Johnson who needs to convince everyone that negotiations are underway and there is a chance of success. Therefore, it is from him in the first place you can expect information that does not correspond to reality.

Well, the pound depends entirely on the theme of Brexit. Now, when the latest news talks about the postponement of Brexit on January 31, the British currency perked up. If the Fed will lower the rate this week, it will be additional fundamental support for the pound. However, as soon as the vector of events will change in the direction of "hard" Brexit, the pound will again change the direction of movement to the "south".

On Monday, September 16, we expect a corrective movement on the pound/dollar pair, as Friday's growth did not end with a correction. The Heiken Ashi indicator will show its beginning with a downward turn.

Nearest support levels:

S1 – 1.2451

S2 – 1.2390

S3 – 1.2329

Nearest resistance levels:

R1 – 1.2512

R2 – 1.2573

Trading recommendations:

The GBP/USD pair continues its steady upward movement. Thus, traders are advised to hold open long positions with targets of 1.2512 and 1.2573 until the reversal of the Heiken Ashi indicator down. It is recommended that new pound purchases be considered after the completion of a correction round.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – the blue line in the indicator regression window.

The moving average (20; smoothed) – the blue line on the price chart.

Support and resistance – red horizontal lines.

Heiken Ashi – an indicator that colors bars in blue or purple.