19.09.201907:07 Forex Analysis & Reviews: Overview of GBP/USD on September 19th. Forecast according to the "Regression Channels". The pound is preparing for the second boring meeting of the regulator in two days

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: 53.3091

Everything related to the results of the meeting of the Fed monetary committee, we reported in the next article on EUR/USD. As for the GBP/USD pair, it should only be noted that it did not notice the Fed meeting at all. Within a few hours, when the meeting was summed up, the volatility of the pair slightly increased, but we can't even say that the dollar went up with the pound. Although, after all, the US regulator lowered the rate – a certain strengthening of the US currency could be expected.

Now, all the attention of traders is focused on today's meeting of the Bank of England, from which, however, one can also not expect anything amazing. The main parameters of the UK monetary policy with a probability of 99% will remain unchanged: the key rate at 0.75%, the volume of bond repurchase under the quantitative easing program – 435 billion. There is no reason to expect that one or more members of the monetary committee suddenly vote for a change in the rate. Most likely, it will be unanimously decided not to change the key rate. Thus, as yesterday, the main hopes of traders will be associated with the speech of the Bank of England Chairman Mark Carney. They would be connected if it was planned. The fact is that not every meeting of the regulator is followed by a press conference with its head. Today is just a meeting when the summing up will be limited only by a cover letter from the Bank of England. Thus, no reaction of traders may not follow at all on a seemingly very serious and important event.

The UK retail sales report for August will be published earlier in the morning. However, firstly, this is not the most significant report, and secondly, the forecasts do not suggest major changes compared to the previous month. Most likely, the increase in August will be 2.9% y/y.

What about Brexit? In the UK, the trial of the prorogation of the Parliament by Boris Johnson continues. Today is the second day of the hearing. In total, the case will be sorted out for three days. Accordingly, in the coming days, the Supreme Court may take an unprecedented decision – to cancel the decision of the Prime Minister of the country, approved by the Queen of Great Britain. For Boris Johnson's political career, it will be the strongest blow. However, it is not only the internal blow that can be dealt with Johnson. The patience of the European Union seems to be running out. The Alliance leaders seem tired of playing the games of Boris Johnson, who is actively creating the appearance of negotiations with the European Union and progress in them. An ultimatum has been set for Boris Johnson: either present alternative backstop offers, or prepare for a "hard" exit from the EU if the Prime Minister does not want to transfer Brexit. This ultimatum, of course, was not announced by Jean-Claude Juncker or anyone else from the EU's top officials. Therefore, these words cannot be considered the final position of the European Union. However, it should be noted that the Bloc's government is still losing patience with the situation with Boris Johnson.

The technical picture of the pound/dollar pair indicates the continuation of the upward trend. As long as the pair is above the moving average line, the pound "stays in the game."

Nearest support levels:

S1 – 1.2451

S2 – 1.2390

S3 – 1.2329

Nearest resistance levels:

R1 – 1.2512

R2 – 1.2573

R3 – 1.2634

Trading recommendations:

The GBP/USD pair is trying to resume the upward movement after the next round of corrections. Thus, traders are recommended to continue buying the pair with the targets of 1.2512 and 1.2573, the first of which has already been worked out. It is recommended selling the pound not before fixing the pair below the moving average.

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

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – the purple line of the unidirectional movement.

CCI – the blue line in the indicator regression window.

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

Support and resistance – red horizontal lines.

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