The strongest and most successful opposition to Boris Johnson's plans by the House of Commons has contributed to a serious increase in the pound. After all, strange as it may seem, this is precisely what reduces the risk of an unregulated Brexit, the consequences of which, for the British economy, are almost impossible to predict. We are talking about the negative consequences.
However, the battles continue, and today the intensity of the struggle can reach a new level. Firstly, the Queen must sign a bill today, which prohibits secession from the European Union without an agreement. Indeed, through this, MPs mean an agreement that governs all issues of the subsequent interaction of Great Britain with the continent, especially on trade and economy. However, these points particularly do not exist in the agreement. Europe itself is not eager to include them there, constantly assuring that they will sit at the negotiating table on this issue, immediately after Brexit. But British MPs do not intend to buy a pig in a poke, because they understand that they can be trivially deceived. After all, Britain itself has rich experience in delivering such promises. The MPs also understand that there is almost no time left, and the bill is accompanied by a document obliging the government of Boris Johnson to ask for another postponement of Brexit, which is to be held on October 31. But problems can arise with this point, and it is no longer the fault of the new prime minister. The fact is that over the weekend, the French Foreign Minister, Jean-Yves le Drian, said the Third Republic could veto another deferment. According to him, the reason is that the UK cannot decide what it wants in any way, and is in no way able to formulate its proposals on a divorce agreement. This issue cannot be drawn-out forever. However, there is virtually no doubt that Elizabeth II will sign a bill that bans Brexit without a deal.
In addition, a vote will be held on the issue of early parliamentary elections in the House of Commons today, which Boris Johnson wants to hold on October 15. However, the House of Commons, although it is ready to go to early elections, but not earlier than October 30, just in order for the government to manage to get a delay on Brexit until January 31 .Given the clear advantage of the prime minister's opponents, Boris Johnson will lose once again.
It is interesting that all this fuss will lead to a complete disregard of data on industrial production in the UK, which is still decreasing by 0.6%. There is every reason to believe that the decline will increase to 1.1%. But the hype surrounding Brexit will overshadow macroeconomic data.
After a rapid upward move, the GBP/USD pair still managed to find a resistance point in the form of a range level of 1.2350, where it formed a slowdown and a gradual corrective movement. Considering the trading chart in general terms, we see that the quote temporarily overcame the peak of the previous corrective movement of 1.2307, which from the point of view of technical analysis means a slowdown in the downward trend, but due to the fact that the move was fully tied to the information background should not draw hasty conclusions. In other words, the quote could simply inflate, reflecting local interest.
It is likely to assume that the corrective move may persist on the market, reflecting the recovery process, where a number of levels 1.2215 --- 1.2150 are located before the quote. At the same time, do not forget about the information background, as I wrote above.
Concretizing all of the above into trading signals:
• Long positions, if we consider it, in the event of price consolidation above 1.2350, or after the recovery process.
• We consider short positions as a further decline towards 1.2215 --- 1.2150.
From the point of view of a comprehensive indicator analysis, we see that indicators on the minute and hour intervals signal sales, reflecting the recovery process. The daily period still reflects upward interest due to the impulse move.
