15.08.201913:55 Forex Analysis & Reviews: GBP/USD. Corbyn is preparing a plot against Johnson, the pound shows restrained optimism

The pound is paired with the dollar within the 20th figure, although the GBP/USD bears made cautious attempts this week to reduce the price to the base of this level. To continue the development of the southern trend, sellers of the pair need to overcome the support of 1.2000 and, accordingly, gain a foothold in the 19th figure. In this case, the GBP/USD pair will change the price corridor, opening up new horizons – up to the 15th figure. But this is not such an easy task: the last time the pair fell to a multi-year low (1.1986) in January 2017, when the British Supreme Court ruled that the government needed the consent of parliament to start the country's exit from the European Union.

More than two years later, the pound returned to the region of record low price levels, and thanks to Brexit again. The only difference is that this time, the British Parliament acts as the "savior" of the pound – according to the vast majority of experts, only members of the House of Commons can prevent the implementation of the "hard" scenario. The new political season in Britain will begin very soon – in just two weeks when parliamentarians will return from summer vacation. However, the key political players of Albion have already announced a "hot autumn" in the House of Commons.

For example, the leader of the Labor Party Jeremy Corbyn, announced today his readiness to initiate in Parliament the issue of announcing a vote of no confidence to the Prime Minister. He said this in an open letter to the leaders of political parties oppositional to the conservative centrists. Corbyn noted that this issue will be submitted to the Parliament "at the first opportunity", adding that he needs to make sure that this scenario will be doomed to success. The House of Commons will return from vacation in early September, and it is obvious that by this time, the Labor Party will understand the general political alignment in Parliament.

Although most of the deputies rejected the option of "hard" Brexit, they are unlikely to "automatically" support the idea of Corbyn. After all, in addition to declaring a vote of no confidence in Johnson, he also proposes to form a government – under the leadership of Labor. As stressed by Corbyn, the term of office of the Cabinet will be "strictly limited in time." The interim government will be called upon to carry out only two tasks. Firstly, it is the prevention of "hard" Brexit, and secondly – the preparation for early national elections. Also, the Laborites will try to lobby for the idea of holding a second referendum, which will raise the question of not only about the expediency of the country's exit from the EU but also about the conditions under which this process should take place. However, according to representatives of Labor, the issue of holding a second referendum in this context looks optional. The main task of the opposition is to remove Johnson from the post of Prime Minister, form a provisional government and prevent chaotic Brexit by another extension of the postponement of the "X-hour" (that is, the extension of article 50 of the Lisbon Treaty). And after that, Corbyn is ready to go to early national elections.

The pound reacted quite positively to the proposal of the opposition leader – the pair GBP/USD rose to the area of the 21st figure. But the growth of the pair is limited. On the one hand, members of the House of Commons can step over their political claims to each other, taking a general decision to declare a vote of no confidence in Johnson. On the other hand, Conservatives are unlikely to agree to entrust Corbyn with a temporary mandate to organize general elections. In other words, the situation around Brexit prospects remains tense – and apparently, the pound will continue to be under the background pressure of this issue until the deputies agree on a common algorithm of action.

It is also worth noting that the British currency this week received support from macroeconomic statistics. Almost all of the key indicators came out either at the level of forecasts or better than expectations. For example, data on the labor market in Britain surprised the dynamics of the growth of the wage component. This indicator (excluding bonuses) jumped to an 11-year high (3.9%), confirming the positive trend of recent months. Taking into account the premiums, this indicator also pleased investors with the growth of up to 3.7% (three-year maximum). Similarly, inflation rates have shown very good results. The overall consumer price index rose in annual terms to 2.1% (the highest since April), and the core index, excluding volatile energy and food prices, rose to 1.8% (the growth rate is recorded for the second month in a row). All inflation indicators came out above the forecast values. The data published today on retail sales in Britain also came out in the "green zone". Although almost all components of this indicator slowed down, experts expected a more deplorable result.

Thus, the current fundamental picture does not allow the GBP/USD bears to organize a large-scale offensive to the South. If Corbyn still implements his ideas (at least partially, in terms of blocking the "hard" Brexit), the pound will receive significant support. So bears are limited in their ambitions – at least the 19th figure is not yet available to them. The bulls GBP/USD, in turn, can settle for a modest weekly rise, the "ceiling" of which is the mark of 1.2205 (middle line of Bollinger Band daily chart). Most likely, the pair will be traded in the middle of the price range of 1.2005-1.2205 until September, in anticipation of powerful information drivers, which, of course, will be associated with the prospects of Brexit.