21.10.201908:30 Forex Analysis & Reviews: GBPUSD and EURUSD: London launches the Yellowhammer emergency action plan. Today, Boris Johnson will once again try to hold a Brexit vote

GBPUSD

The pound opened slightly lower after it was announced on Saturday that the British government had launched the Yellowhammer contingency plan, developed in the event of the UK's withdrawal from the EU without a deal.

It happened after British Prime Minister Boris Johnson failed to hold a vote on his Brexit agreement, which was approved by the EU last Thursday. Instead of holding a vote, the deputies approved an amendment made by a former member of the ruling Conservative Party, Oliver Letwin. This amendment makes it meaningless to vote on an agreement with the EU. Boris Johnson, counting on a clear majority for his agreement, also faced a new threat on Sunday evening. The Labor Party announced that they would seek support from Brexit opponents in the Tory and DUP parties for amendments that would force them to completely abandon the deal – or accept the softer Brexit scenarios.

Also on Saturday, both sides sought support to force Boris Johnson to make concessions and ask the European Union for a three-month extension of the UK's exit deadline. It has also become known that the Labor Party wants to talk with representatives of the Democratic Union Party (DUP) about a better deal.

However, the Prime Minister remains hopeful. Already today, Johnson will try to get parliamentary support for his Brexit deal by a direct yes or no vote. The vote is scheduled for today, in order to prevent opponents from making amendments that could become a problem for the government. A number of political scientists and economists believe that Johnson is very close to winning a majority to approve his deal, having the support of eight members of parliament from the Labor Party, and a majority in his Tory party. However, according to some sources, speaker John Bercow may prevent Johnson from holding another vote on the agreement, as the Prime Minister tried and failed to do so on Saturday.

In any case, the beginning of the week promises to be hot, on which the further direction of the pound will depend. Many are waiting for a downward correction after the largest weekly growth.

As for the technical picture of GBPUSD, it remained unchanged. The bears will try to hold the resistance of 1.2920, pushing off from which, the pressure on the trading instrument may increase, which will lead to a correction in the area of 1.2830 and 1.2750. If Johnson manages to hold a vote, the demand for the pound will return, and a breakthrough of the resistance of 1.2920 will lead the trading instrument to new highs of the month in the area of 1.2990 and 1.3080.

EURUSD

Friday's fundamental data on the US economy put pressure on the US dollar, which continued to decline against the European currency. According to the data, the index of leading indicators decreased. The Conference Board report indicated that the index of leading indicators in September was 111.9 points, while economists expected the index to remain unchanged. It should be noted that the negative dynamics of the index reflects the uncertainty of prospects and lower expectations of companies. The future outlook for the euro will depend on developments in the UK and another attempt by Boris Johnson to hold a Brexit vote.

As long as the bulls hold the trading instrument above the support of 1.1150, there is a fairly high chance for the continuation of the euro's growth in the area of the highs of 1.1190 and 1.1230. The breakthrough of the support of 1.1150, and accordingly the downward correction, which will be formed after this, will rest against the lows of 1.1120 and 1.1090.