23.10.201909:29 Forex Analysis & Reviews: Hot forecast for GBP/USD on 10/23/2019 and trading recommendation

It seems that nothing boded trouble, but incidents could not be avoided yesterday. The House of Commons expressed its agreement with the general principles and provisions of Boris Johnson's proposed version of the divorce agreement with the European Union. So this alone should have seriously inspired market participants. However, all the same MPs spoke in favor of the fact that the accelerated version of the deal, which implies a final vote this Thursday, is not the best solution, and a little more time is needed. Obviously, this implies the clear desire of a number of MPs to force Boris Johnson to obtain another delay from the European Union, this time until December 31. But this option does not suit Boris Johnson himself, who put his own reputation and career at stake, promising to arrange a divorce from the European Union no later than October 31. So the decision of the House of Commons forced him to suspend the process of ratification, and therefore consideration, as well as voting, of the deal. It all ended with the fact that Donald Tusk officially announced that he would submit for consideration the issue of granting the UK another postponement. At the moment, it is highly likely that Boris Johnson could announce an early election, in the hope of gaining the support of Her Majesty's subjects. So the story with Brexit, which until recently seemed to be drawing to a close, again becomes unpredictable. Therefore, it is not surprising that investors became nervous and cautiously began to sell the pound.

However, besides the political factor, the pound had no reason to weaken. Rather, the opposite. After all, home sales in the secondary market of the United States, which were supposed to decrease by 0.7%, fell as much as 2.2%, which once again makes us a little nervous about a possible recession.

Secondary Home Sales (United States):

The GBP/USD pair once again found a resistance point in the region of the psychological level of 1.3000, where as a result, an impulsive downward movement formed amid the information flow. The conversation about restoring the downward mood has resumed, but this is more a premature proposition than a real fact, since the emotional mood of market participants is maintained and we can also quickly return to the point of resistance. Considering the trading chart in general terms, we see a fairly small pullback, compared with an array of vertical movement - 800 points.

It is likely to assume that the pound/dollar pair will continue to frantically fluctuate in the flow of information, where overbought still prevails on the market. In terms of technical analysis, they expect a further recovery towards the level of 1.2770, but in the case of a characteristic ambiguity, we can be pulled into temporary fluctuation within a fairly wide flat of 1.2850/1.3000.

Concretizing all of the above into trading signals:

- Long positions, we consider in case of consolidating prices higher than 1.2900, with the prospect of a move to 1.2950-1.2980.

- We consider short positions in the event of a continuation of the recovery move and price taking lower than 1.2830.

From the point of view of a comprehensive indicator analysis, we see a diverse picture, where the indicators on the minute and hour intervals are subject to existing recovery, and the daily periods adhere to the inertial course.