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) – sideways.
CCI: -31.8442
Yesterday, we wrote about all the events that took place in the walls of the Supreme Court and the first comments of representatives of the conservatives, Jeremy Corbyn and other politicians. Also yesterday, information appeared that the Speaker of the House of Commons, John Bercow, had instructed the deputies to prepare for the restoration of the parliamentary session on September 25, that is, today. "I instructed the deputies to prepare for the resumption of activities, as the decision to break the Parliament was illegal and, accordingly, is invalid," said Bercow. Thus, if there are no unexpected obstacles to this, then today the parliamentarians will return to their seats and continue the war against Boris Johnson and the "hard" Brexit.
Meanwhile, against the backdrop of five iconic defeats of Boris Johnson, as well as overt calls to resign, Labor leader Jeremy Corbyn became more active. If earlier he occupied the role of the opposition leader, now he is marking the prime minister in the chair. Corbyn said that if his party succeeds in taking power, a second referendum on Brexit will be held within six months, in which citizens can refuse to leave the country from the EU. "The Labor Party must put an end to the lawlessness and chaos for three and a half years, during which the conservatives divided the country. The only way to resolve this issue is to allow the people to speak out again and decide whether they want to leave the EU on good terms or not at all. Within three months of coming to power, Labor will get an agreement from Brussels on reasonable terms, which we have repeatedly called trade unions and business: a new customs union, relations within the single market and guarantees of protection of rights," Corbyn promised. It sounds beautiful, of course, but there are no guarantees that the country will be able to reconsider the terms of the agreement with the European Union, that the European Union will generally start new negotiations and unexpectedly refuse the "backstop", which is the cornerstone of the negotiations. Moreover, the opinion "to leave the EU" can win the referendum, but it will be possible to agree on a new "deal". So even with Prime Minister Jeremy Corbyn, there is no guarantee that the "Brexit" epic will end quickly and positively for the UK. However, we recognize that this is indeed the best time for Labor to try to seize power in the country. Still, for more than three years, conservatives have not been able to remove the Kingdom from the jurisdiction of Brussels; moreover, many more failures and defeats are associated with their current leader Johnson than victories.
Well, the pound returned yesterday to the area above the moving average line, so at the moment, we can state the resumption of the upward trend. However, the new consolidation below the moving average will again change the market mood to bearish.
Nearest support levels:
S1 – 1.2451
S2 – 1.2421
S3 – 1.2390
Nearest resistance levels:
R1 – 1.2482
R2 – 1.2512
R3 – 1.2543
Trading recommendations:
The GBP/USD currency pair has fixed above the moving average. Thus, traders are now encouraged to consider buying the pound/dollar pair with targets of 1.2512 and 1.2573. However, the Heiken Ashi indicator has already painted one bar blue, which signals a possible turn of the downward movement with a new fixation below the moving average.
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.
The material has been provided by InstaForex Company - www.instaforex.com