4-hour timeframe
Amplitude of the last 5 days (high-low): 116p - 63p - 164p - 100p - 78p.
Average volatility over the past 5 days: 104p (high).
A meeting of the opposing parties of the "hard" Brexit took place today on August 27, to which the United Kingdom is moving with might and main thanks to Boris Johnson. The meeting was convened by Labour leader Jeremy Corbyn, who openly opposes "hard" Brexit and the prime minister's policies. As part of the dialogue, it was decided to try to change the legislation to prevent Johnson from realizing the exit from the EU on October 31. The meeting was attended by representatives of the Scottish National Party, the Liberal Democratic Party, Change UK, the Welsh Plaid Cymru Party and the Green Party. Green Party MP Caroline Lucas called Boris Johnson's desire to leave the EU October 31 no matter what as "recklessness" is and said that changing legislation is the best way to save the country from this "recklessness". In turn, Boris Johnson has already announced via Twitter that the country will leave the EU on time, as "the results of the 2016 referendum must be respected."
At the same time, we finally waited for official comments from EU officials regarding Johnson's statement that Britain is not obligated to pay almost $50 billion for leaving the EU if there is no "deal". EU Commissioner for Economic Affairs Pierre Moscovici said that in any case, London must pay the bill for leaving the eurozone, even if an agreement on Brexit is not concluded. Johnson previously said the UK would pay only about $10 billion. Moscovici noted that if London refuses to pay, it will mean sovereign default. Guy Verhofstadt, Brexit coordinator for the European Parliament, said that the UK's refusal to repay the debt would nullify any transitional arrangements already made. Debt repayment will be the first and necessary condition for dialogue on a trade agreement after Brexit. As you can see, the European Union has something to oppose Johnson's "recklessness". Given the current state of the UK economy, the collapse of the pound, the decline in the country's investment attractiveness, as well as the flight of companies from Great Britain, a trade war is clearly not needed. Britain does not need a "hard" Brexit. Thus, in the next two months we expect a fierce struggle with Boris Johnson, which will be waged on the sidelines of the Parliament.
Meanwhile, the pound sterling continues to rise again. We continue to believe that the British currency's growth is purely technical. Bears loosened their grip a bit, which is enough for the pound to go a little higher. However, market sentiment remains "bearish", so you can expect a resumption of a downward trend at any time.
Trading recommendations:
The pound/dollar currency pair continues to adjust. Formally, long positions remain relevant while aiming for a resistance level of 1.2363, but it is recommended to trade with increasing caution with great caution. It is recommended to sell the pound after the formation of a signal from Ichimoku "dead cross".
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 is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicator window.
The material has been provided by InstaForex Company - www.instaforex.com