24.10.201907:26 Forex Analysis & Reviews: Overview of GBP/USD on October 24th. Forecast according to the "Regression Channels". The EU has agreed to give London a new respite on Brexit

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: 19.3988

The GBP/USD currency pair yesterday also completed the correction near the moving average line but did not work it out, so we did not have a pronounced signal about the completion of the correction. It came later when the Heiken Ashi indicator turned up. Thus, from a technical point of view, the upward trend now has every chance to resume. The volatility of the currency pair has decreased in recent days but remains very high, more than 100 points per day. Macroeconomic reports for the past three years have not been published in the UK and there will be none today, so all attention is paid to American macroeconomic statistics.

Have you noticed that almost all the plans that Boris Johnson was planning to implement eventually collapsed? Of the most high-profile defeats of the British Prime Minister can be distinguished:

1) The law blocking the "tough" Brexit and forcing Johnson to negotiate with the EU about the "deal", adopted at the very beginning of September, before the start of the prorogation.

2) The abolition of the prorogation through the Supreme Court, which found the actions of Boris Johnson illegal.

3) The Parliament's refusal to consider Johnson's "deal" at an accelerated pace to be released before October 31.

4) The refusal of the European Parliament to pay attention to Johnson's second letter, in which he opposes the postponement of Brexit.

And this we have listed only the very first defeats of Johnson that came to mind. What can you say about the victories of the Prime Minister? A rhetorical question.

Just tonight, it became known that all the member states of the European Union agreed to the proposal of the President of the European Council, Donald Tusk, to grant a delay on Brexit to the UK. The new date has not yet been approved. The duration of the new and the next delay is in the process of discussion. All the heads of the EU countries agreed with the opinion that a "hard" Brexit should be avoided, and this was the basis for the approval of the next transfer. As you can see, only Boris Johnson stands for a speedy exit from the European Union and he does not find support anywhere, either in Europe or in his Parliament. The most likely deadline for postponing Brexit is 3 months, that is, on January 31, 2020. European periodicals are full of headlines that Boris Johnson failed to keep his promise and withdraw from the EU until October 31. However, Johnson did not keep several promises at once. The words about "death in the gutter" will be remembered for a long time by the current Prime Minister.

Meanwhile, the "knife in the back" Johnson stuck and Irish Prime Minister Leo Varadkar. Earlier, Johnson and Varadkar held a meeting in which they said that Brexit with a "deal" is possible until October 31 and negotiations between the parties are progressing successfully. It was with this news that the pound began to increase by 800 points, which remains at the moment. Now, Varadkar said he fully supports Donald Tusk's proposal to postpone Brexit. Also, both Tusk and Varadkar noted that the UK will be able to leave the European Union until January 31, if the "deal" is nevertheless ratified by the British Parliament.

Boris Johnson himself will now unequivocally seek new parliamentary elections, since, in fact, he simply does not have anything else to do. The current composition of the Parliament has already blocked 4 "deals", most likely, and will continue to block them since the essence of the agreements themselves does not change. Well, the opposition, led by Jeremy Corbyn, will defend the idea of a second referendum, seeking the abolition of Brexit with its help. We also believe that this is the best option for the British. Let the people decide whether they want to continue this epic for many years?

Well, to top off the topic of Brexit, it is reported that the "hard" divorce of the UK and the European Union will hit not only the real sectors of the Kingdom's market but also the Internet sphere. It is reported that up to 70% of online shoppers in British online stores can refuse to buy if duties on goods from Britain will rise as a consequence of the "hard" Brexit. The same applies to the British themselves, who may stop making purchases abroad, in particular in the countries of the European Union. It is also noted that between the EU and Britain, additional customs duties may begin to apply, which will force the customer to pay when their goods only arrive in the country but until the moment when they receive it on their hands.

From a technical point of view, there are no prerequisites for the completion of the upward trend now. Both channels of linear regression are directed upwards, the Heiken Ashi indicator is turned upwards, the moving average is directed upwards. The only thing that continues to be confusing is the fundamental backdrop, which still cannot be called optimistic for the pound. Yes, the fact that there won't be a "hard" Brexit any time soon is a good thing. But at the same time, Brexit itself remains in limbo, and the negative impact is already on the UK economy.

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 pair has completed the downward correction. Thus, traders are advised to buy the British currency again with targets of 1.2939 and 1.3062. However, we recommend doing this carefully, as the upward trend persists, but the fundamental background can turn the pair down at any moment. The reversal of the Heiken Ashi indicator downwards will indicate a new round of correction. It is recommended to consider sell positions not earlier than overcoming the moving average with the nearest target of 1.2695.

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.

Possible variants of the price movement:

Red and green arrows.