27.08.201908:07 Forex Analysis & Reviews: Overview of GBP/USD on August 27th. Forecast according to the "Regression Channels". The European Union responds "in tone" to Boris Johnson. Relations between the European Union and Britain are heating up

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) – up.

CCI: 32.1370

The meager chances of continued strengthening of the British currency against the dollar remain. Still, the GBP/USD pair continues to trade above the moving average line, and the lower channel of the linear regression is directed upwards. However, the fundamental background does not allow the bulls to feel at ease. It does not give a feeling of confidence. The latest news from the UK was that Prime Minister Johnson notified the EU of the refusal to pay most of the 39 billion debt for leaving the EU. According to Johnson, since the EU does not want to renegotiate the terms of the Brexit agreement, then Theresa May's agreement to pay the above amount is no longer relevant. The European Union did not think long about the answer and said that if the UK refuses to pay the debt, Brussels will refuse to discuss a trade deal in the transition period after Brexit. According to sources in Brussels, the "top" of the EU believes that Britain should respect its debts. If Johnson refuses to pay the debt, the European Union will abandon all previous agreements relating to the transition period, which should smooth out the negative impact of Brexit on the economy and other areas of the UK. The EU believes that key issues such as money, citizens' rights, and the Irish border should be fully discussed and there should be no issues between the parties. This is a prerequisite for discussing further trade relations between the Bloc and the Kingdom. It is also reported that the UK government may face new requirements of the EU countries, especially coastal ones, regarding fishing, as this is the area in which the EU will suffer more than the UK when implementing a "hard" Brexit.

Based on these data, we have to state that the conflict over Brexit between the EU and the UK is only intensifying. Soon the second part of the "Marlezon Ballet" will begin, which provides for events within the British Parliament, in particular, the confrontation between Jeremy Corbyn and Boris Johnson. Also, Johnson planned to suspend the work of Parliament for 5 weeks to freely implement a "hard" Brexit, and Corbyn is looking for support from other parliamentarians to declare a vote of no confidence in Johnson and remove him from office.

Thus, shortly, the pound may be fixed back below the moving average, bears – to return to trade, and the mood of the market – to change to a downward.

Nearest support levels:

S1 – 1.2207

S2 – 1.2146

S3 – 1.2085

Nearest resistance levels:

R1 – 1.2268

R2 – 1.2329

Trading recommendations:

The GBP/USD pair is still adjusted within the upward trend. Thus, long positions with targets of 1.2268 and 1.2329 remain relevant today. However, the consolidation of the pound/dollar below the moving will make it possible to open short positions with the first target of 1.2146.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustrations:

The upper linear regression channel – blue line unidirectional movement.

The lower linear regression channel – purple line unidirectional movement.

CCI – the blue line in the indicator regression window.

The moving average (20; smoothed) – blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.