18.10.201907:21 Forex Analysis & Reviews: Overview of GBP/USD on October 18th. Forecast according to the "Regression Channels". Will Boris Johnson suffer the biggest defeat of his political career tomorrow?

4-hour timeframe

Technical data:

The upper channel of linear regression: direction – up.

The lower channel of linear regression: direction – up.

The moving average (20; smoothed) – up.

CCI: 92.4906

In principle, now all the questions come down to whether the UK Parliament will vote tomorrow for the draft "deal" with Boris Johnson's European Union. Yesterday, when it became clear that the EU and Britain agreed on the terms of the agreement and miraculously came to a consensus on the Northern Ireland border, almost all political forces of the UK made comments. Based on these comments, it becomes clear that the Laborites consider the deal "saleable", the Unionists are not satisfied with its terms regarding VAT and some other issues, and the Scots are simply against any Brexit, therefore they will not vote for the "deal" by Boris Johnson. Thus, the question arises, who will be in favor of Boris Johnson's agreement? Except for the conservatives? At the moment, it seems that the vote on the "deal" will again fail, or rather rejected for the fourth time by the Parliament of Great Britain. It's even hard to imagine what should change in the mood of opposition parliamentarians so that they change their minds. Theresa May's "deal" did not arouse delight among the deputies, while the "deal" by Boris Johnson was criticized on the very first day by the leader of the Opposition Forces, Jeremy Corbyn.

In the end, we all came to the point that we wrote about many times: the British Prime Minister can negotiate anything with the European Union, make any concessions, but the British Parliament will have the keyword. And tomorrow, given the fact that as many as three parties have refused to support this "deal", it will be very difficult for Boris Johnson to expect his first truly significant victory at the helm of Great Britain. Of course, successful negotiations with Brussels can also be called a victory, this victory is incomplete without the approval of the agreement by the British deputies. Thus, we are still waiting for Johnson's first victory, if, of course, it happens at all. But the number of defeats totals at least 5. And tomorrow the sixth may follow.

The pound is still holding near its maximum value for several months, however, if the British Parliament blocks the deal tomorrow, then the collapse of the pound quotes on Monday is inevitable. The question will be just how strong it will be. And in this case, traders will have to think about what Boris Johnson will do next, ask for a delay from Brussels, or go against the law and withdraw the country from the Alliance according to a "tough" scenario.

The technical picture of the pound/dollar pair shows the development of the Murray level of "6/8" – 1.2939 and a rebound from it, thus, at the moment, a downward correction can begin or has already begun. Today, October 18, it is unlikely to expect strong movements, as the results of the meeting of the parliament will be known only tomorrow, and no macroeconomic news from the UK today is not expected.

Nearest support levels:

S1 – 1.2817

S2 – 1.2695

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2939

R2 – 1.3062

R3 – 1.3184

Trading recommendations:

The GBP/USD currency pair continues its upward movement. Thus, it is still reasonable to support previously opened purchases of the pound. We would not recommend opening new buy orders in anticipation of the meeting of the Parliament of Great Britain. We still believe that the pair may return to the downward channel in the coming days. In any case, any position now carries 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) – blue line on the price chart.

Support and resistance – red horizontal lines.

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