GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD pair performed a consolidation under the correction level of 23.6% (1.2293), however, the bullish divergence near the MACD indicator is brewing or even already formed, which allows the pair quotes to return to the Fibo level of 23.6% and even close above it. This consolidation can be interpreted in favor of the pound and expect some growth in the direction of the correctional level of 38.2% (1.2501). At the same time, the bulls and bears are now clearly pulling the rope without the obvious advantage of one of the teams, thus, the fall of the pound/dollar pair can resume after the rebound from the Fibo level of 23.6%.
Brexit on pause. It remains on pause, as the European Union and Great Britain are unable to advance in the negotiations. The European Parliament has long understood this and offers London a new deferment, the UK government must formally request a deferment. There must also be good reasons and grounds for postponing Brexit, European Parliament President David Sassoli said. Mr. Sassoli also said that the deal concluded with Theresa May’s government on November 25, 2018, is the best that the EU can offer Britain, and Boris Johnson’s proposals do not completely solve all the problems because of which the parties can’t reach an agreement for a long period.
At the same time, according to insider information from the British Parliament, five members of the UK Cabinet are preparing to leave their positions due to the growing threat of the country’s exit from the EU under the “No Deal” scenario. According to the same information, at a meeting between the Cabinet and the Prime Minister, Ministers warned Johnson of serious threats of breaking the Belfast Agreement, which ended the long conflict between Ireland and Northern Ireland. Also, the same unnamed source reports that a very large number of conservatives will leave the party’s ranks if Johnson promotes a “No Deal” Brexit in the general election. As we can see, Boris Johnson has no support even within his party. Deputies understand all too well the consequences of such a withdrawal of the Kingdom from the European Union.
What to expect today from the pound/dollar currency pair?
The pound/dollar pair made a return to the correction level of 23.6% (1.2293), but this time from the bottom. Tonight will be another speech by Fed Chairman Powell, and throughout the day traders can again follow the news from the British Parliament, as well as from the European Parliament, the European Council and the European Commission. The subject of the monitored messages, of course, is “Brexit” I do not expect the pound/dollar pair to close above the Fibo level of 23.6% today. The information background, in my opinion, remains negative for the “Briton”.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
Forecast for GBP/USD and trading recommendations:
I do not recommend buying a pair shortly since the information background can hardly be called positive for the pound.
I recommend considering the new sales of the pair with a target of 1.2014 if it rebounds from the correction level of 23.6%, with the stop-loss order above the level of 1.2308.
The material has been provided by InstaForex Company – www.instaforex.com