16.10.201907:12 Forex Analysis & Reviews: Overview of GBP/USD on October 15th. Forecast according to the "Regression Channels". Most world experts believe that Brexit will be postponed again

4-hour timeframe

Technical data:

The upper channel of linear regression: direction – upward.

The lower channel of linear regression: direction – upward.

The moving average (20; smoothed) – upward.

CCI: 99.9585

The pound continues to show surprising growth, which is not confirmed by verified fundamental information. It turns out that traders believe in a positive outcome of Brexit, believes that Boris Johnson is close to signing an agreement with Brussels, believes that the UK Parliament will not cut a possible "deal" with the European Union for the fourth time. No information or facts are at the core of this belief. There are only media publications that support the hopes of the whole world for a civilized divorce of Great Britain and the EU at the end of October.

At the same time, against the backdrop of all this confusion, Reuters surveyed 49 experts, and 44 responded that Brexit would most likely be rescheduled. That is, most of the people whose opinion can be called professionals, do not believe that the parties will come to a consensus in the next 2-3 days. Moreover, 35% of respondents believe that the parties, even as a whole, will not be able to come to a common denominator, and Brexit will eventually follow a "tough" scenario. What is there to say? It remains only to wait for the EU summit, to wait for information from it, to wait for the official statements of Johnson and Juncker, Tusk and the company.

We, in turn, still do not see how Boris Johnson's plan regarding the Northern Irish border can work. Recall that the stumbling block lies in the fact that between Northern Ireland and Ireland there may be a tight border with customs points and inspections, since the first country will leave the EU with Britain, and the second will remain in the EU. Since the whole island of Ireland is one person divided into two countries, for a long time conflicts have occurred just because of attempts to divide the people. Only in 1998 was it possible to reach a peace agreement (Belfast Treaty), after which the conflicts calmed down. But the emergence of a hard border between the countries can ignite these conflicts again, and this is precisely what the United Kingdom fears. At the time, the EU did not care about these problems. And justifiably don't give a damn. Why should Brussels be concerned about the problems of Great Britain, which itself has expressed a desire to leave the Alliance? Brussels needs, on the contrary, to have a clear border, because if it is not on the island of Ireland, the "back door" to the European Union will be open 24/7. How can Johnson's plan to move the border 10 km in each direction from the actual one solve this problem? Or creating a border in the Irish Sea? In essence, it all comes down to whether there will be new unrest on the island of Ireland after Brexit and how to avoid it. But they cannot be avoided if any border appears, even at sea, at least 50 km from the real border. Because of the very definition of "border" means customs control, verification of passports, an inspection of transported goods. Moreover, Northern Ireland may not carry out customs control, but it will be carried out by the European Union from Ireland, which again means that there is a border between the countries.

Nearest support levels:

S1 – 1.2695

S2 – 1.2634

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2756

R2 – 1.2817

Trading recommendations:

The GBP/USD currency pair continues a strong upward movement. Thus, it is quite reasonable to support previously opened purchases of the pound. But we would not recommend opening new long positions ahead of the EU summit. We still believe that the growth of the pound to some extent is not justified, and the pair may return to the downward direction in the coming days. In any case, any positions are now associated with increased risks.

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

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

CCI – the blue line in the regression window of the indicator.

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.