11.10.201911:34 Forex Analysis & Reviews: Trading strategy for GBP/USD on October 11th. Irish and British Prime Ministers see "light at the end of the tunnel"

GBP/USD – 4H.

As seen on the 4-hour chart, the GBP/USD pair performed a reversal in favor of the pound after the formation of a bullish divergence at the MACD indicator and fantastic growth in the direction of the correction level of 38.2% (1.2501). This growth does not stop today and is very difficult to explain, given the lack of really important messages from the fields of Brexit. The rebound of quotes from the Fibo level of 38.2% will allow traders to expect a reversal in favor of the American currency and a slight drop in the direction of the correctional level of 23.6% (1.2293). There are no new emerging divergences in any indicator today.

What happened last night, and what led to the growth of the pound by almost 250 points, can only be described as "inexplicable and unbelievable". Yesterday, negotiations were held between British Prime Minister Boris Johnson and Irish Prime Minister Leo Varadkar, after which the parties announced that a deal with the European Union could still be concluded before October 31. On the basis of what such conclusions are made – it is difficult to say. Moreover, there are 27 member states in the European Union. Ireland's vote alone is clearly not enough. Most other EU members have spoken negatively about Boris Johnson's proposals for a border on the island of Ireland. Shoals of "Johnson's plan" by Angela Merkel, Donald Tusk and Jean-Claude Juncker. It turns out that traders reacted with large-scale purchases to information that could already be refuted by the European Union tomorrow, which will decide on the agreement. Moreover, the growth of the pound continues at this moment.

From my point of view, the market is just beginning to "storm". Traders begin to panic, as a large number of different contradictory information is received, it is difficult to understand what is true – where there are just rumors and where there is frank disinformation. Hour X is approaching, the EU summit will be held in a week, and then traders will know what awaits the UK in the coming months or years, as well as the fate of Boris Johnson, since there are a huge number of development options – from prison, if he implements Brexit "No Deal", ending with the announcement of a vote of no confidence and impeachment. All of this potential news has huge implications for the pound. That is why any high-profile news causes serious movements in the foreign exchange market. This point should just be accepted. Until October 19, the pound/dollar pair may regularly show fluctuations similar to yesterday.

What to expect today from the pound/dollar currency pair?

The pound/dollar pair performed an increase to the correction level of 23.6% (1.2293). It is difficult to even imagine what can be expected today from the British currency, given the information background, which led to an increase of 250 points yesterday. Today, it is quite possible to expect another 100-150 points up or 250 points down, if, for example, someone from the EU government denies yesterday's information.

The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.

Forecast for GBP/USD and trading recommendations:

I recommend buying the pair with a target of 1.2668 if consolidation above the Fibo level of 38.2% with a stop-loss level of 1.2501 is performed.

I recommend considering selling a pair with a target of 1.2303 if it rebounds from a correction level of 38.2% with a stop-loss order above the level of 1.2501.