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: 95.2473
In the evening article for September 17, we have already said that the meeting in the Supreme Court of Great Britain in the case of illegal suspension of Parliament by Boris Johnson has begun. Unfortunately for the deputies, despite the fact that the Scottish Court found the Prime Minister's decision illegal, a similar decision with the issuance of an official court order should now be made by the Supreme Court of the country. Yesterday was the first day of the hearing. There will be at least three of them, after which the verdict will be delivered. It is expected that the decision of the Court will be known between September 20 and 24. If the Court satisfies the claim of a group of deputies, the parliamentarians will be able to return to their duties much earlier than the official deadline for the completion of prorogation. This can be counted as another defeat for Boris Johnson, which he has been collecting for almost 2 months. However, not everything is so simple. First, the British government has already appealed to the same Supreme Court of Great Britain against the decision of the Scottish Court. It should be noted that the main goal sought by the trials of Johnson's opposition is to cancel his decision to dissolve Parliament before October 14. However, if lawsuits drag on until October 14, or, for example, until October 10, then this will not make much sense. One way or another, the Parliament will not work before the deadline by Boris Johnson and it does not matter whether the Supreme Court recognizes its decision as illegal or not. Secondly, nothing prevents the government from lodging new appeals, challenging the decisions of the Court and using other "tricks and feints". Surely, Boris Johnson has ideas about this. Therefore, in general, judicial wars between parliamentarians and the government are still ongoing and it is not worth making premature conclusions on this matter.
The UK consumer price index for August will be published today. Inflation is expected to slow to 1.9% y/y, which also raises some concerns about the movement of the pound/dollar currency pair on Wednesday, September 18. However, if in the case of the euro, the pair can resume a downward trend due to weak inflation in the EU, in the case of the British currency, the maximum – the pair will begin to correct. The pound has been feeling much better than the euro in recent weeks and continues to work out a strong oversold against the US dollar as long as there is a good opportunity to do so.
From a technical point of view, the pound/dollar pair corrected and almost worked out the moving average and resumed the upward trend. Today, if there are no surprises from the Fed or inflation in the Foggy Albion, the pair will continue its strengthening.
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 resumed its upward movement. Thus, traders are recommended to continue buying the pair with the targets of 1.2512 and 1.2573, the first of which has already been worked out. It is recommended to sell the pound sterling not before the bears break the moving average line. Tonight, increased caution is advised due to the Fed meeting, where surprises are still possible.
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.
