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4-hour timeframe
Amplitude of the last 5 days (high-low): 176p - 144p - 65p - 151p - 73p.
Average volatility over the past 5 days: 122p (high).
Just yesterday we wrote that the UK Parliament had gone on a 5-week vacation, and today news was received from the High Civil Court of Scotland, which ruled that the decision of Boris Johnson to suspend the Parliament was illegal, respectively, has no legal force, despite the fact that Queen Elizabeth II approved it. Thus, formally, this means that deputies can return to work in the near future. Most likely, this will happen after September 18, when full hearings will be held in the Supreme Court. After that, a court order will be required to reverse Johnson's decision. Well, the government of Boris Johnson now has about a week to appeal the decision of the court of Scotland. What does this mean for the prime minister of Britain? Game over? It seems that Johnson's great hopes were connected precisely with the vacation of the MPs, so that they would not interfere with his daily meetings, calls for responsibility and reports on his actions. Now, although it is not yet clear when the deputies will return to their work, working sessions in the Parliament should resume, and it will be extremely difficult for Johnson to realize his "backstage games". For example, one of the latest decisions in Parliament was the publication of documents on the so-called "hard" Brexit, which could lead to new questions for the prime minister.
In general, from our point of view, this is a complete failure of the prime minister's plans. Meanwhile, another social study was conducted in the UK, which showed that if a referendum on Britain's withdrawal from the EU were held now, 37% would vote "against", 34% would vote "yes", and 18% would abstain from voting. Although these figures do not completely reflect the real state of affairs and the mood of the UK population, it is impossible not to note that a certain part of the citizens are simply tired of Brexit, as it turns out to be somehow endless.
We did not receive macroeconomic statistics from the UK today. The only report of the day is the producer price index in the US, which slightly rose in August compared to the previous period and amounted to +1.8% y/y. This report has little hope that inflation in the United States, which will be reported tomorrow, will also accelerate. If this happens, the US dollar may go a little higher against the British pound, as in recent days the bulls have loosened their grip a bit. Of course, for the pound, the Brexit theme remains more important. In the coming days, we may receive new information from Boris Johnson or a statement by Jeremy Corbyn on the decisions of the court of Scotland. All this is very interesting and can affect the British pound.
The technical picture reflects the preservation of the upward trend, but it does not deny the readiness of the pound/dollar pair for a downward correction. The MACD indicator has turned down for a long time, but the price is not going down, the pair is in a sideways correction, as evidenced by the Bollinger Bands indicator. A strong inflation report tomorrow could help the bears become active and return the pair to the level of 1.2202.
Trading recommendations:
The GBP/USD currency pair remains within the upward trend, so long positions remain relevant with a target of the resistance level of 1.2437. To open them, it is recommended to wait for the MACD indicator to turn up, while the price should be above the critical line of Kijun-sen. Pound sales can be seen below the Kijun-sen line with an initial target of 1.2202.
In addition to the technical picture, fundamental data and the time of their release should also be taken into account.
Explanation of the illustration:
Ichimoku indicator:
Tenkan-sen is the red line.
Kijun-sen is the blue line.
Senkou Span A - light brown dotted line.
Senkou Span B - light purple dashed line.
Chikou Span - green line.
Bollinger Bands Indicator:
3 yellow lines.
MACD indicator:
Red line and bar graph with white bars in the indicator window.
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