GBP/USD. September 9. Results of the day. British Parliament is not afraid of a re-election, but wants guarantees to prevent

4-hour timeframe

analytics5d76e3ef2577f.png

Amplitude of the last 5 days (high-low): 139p - 147p - 176p - 144p - 65p.

Average volatility over the past 5 days: 134p (high).

In London, the last session of Parliament kicked off before its forced leave for five weeks by Boris Johnson. Of the interesting moments of the meeting, it can already be noted that Parliament speaker John Bercow announced his resignation if Parliament approves early elections today (voting will take place a little later). Otherwise, he will leave his post on October 31. According to insider information from the Parliament, the Opposition parties have already decided not to support the government's proposal for early elections, as for the first time. According to Labour and Opposition Leader Jeremy Corbyn, the government must guarantee the impossibility of a "hard" Brexit BEFORE the re-election. The position of Boris Johnson in this matter is clear and obvious. He understands that the current composition of the Parliament will put "sticks in the wheels" to the last. Even if the prime minister tries to circumvent the decision of the Parliament and ask the EU not to grant a postponement for Brexit, MPs can initiate the opening of a criminal case against Johnson for disobeying British law. Thus, Johnson wants to form a new Parliament, hoping to get the majority of the seats in it, which will allow him to make decisions almost solely through the members of his party. Boris Johnson has already begun to implement internal cleansing - 21 party members have left its ranks. It is clear that the opposition will not approve early elections, as this means additional chances for the Johnson government to still implement Brexit without an agreement with the European Union until October 31. In general, today we will witness the final session of Parliament before the holidays and, possibly, even re-elections.

Meanwhile, macroeconomic reports from the UK pleased traders. In July, GDP grew by 0.3% m/m, and industrial production by 0.1% m/m. Unfortunately, production fell by 0.9% in annual terms. However, the pound sterling is still growing on September 9, either responding to generally good news, or to traders' expectations that MPs will not accept Johnson's proposal for re-election. Most likely, based on both of these factors. We state the fact: the mood among traders now remains "bullish" due to the events of last week, or rather, the defeats of Boris Johnson in the Parliament, because of which the likelihood of a hard Brexit has significantly decreased. However, any victory of Boris Johnson will again bring the country closer to leaving the EU on October 31, and the pound to a new fall against the US currency.

Trading recommendations:

The GBP/USD currency pair, after a slight correction, resumed the upward movement, which is still completely substantiated fundamentally. Thus, in the coming hours, it is recommended to continue to trade on the rise while aiming for the first resistance level of 1.2437. Further dynamics of the pound/dollar pair will depend on the results of the vote on Boris Johnson's proposal to dissolve the Parliament and form a new composition.

In addition to the technical picture, fundamental data and the time of their release should also be taken into account.

Explanation of the illustration:

Ichimoku indicator:

Tenkan-sen is the red line.

Kijun-sen is the blue line.

Senkou Span A - light brown dotted line.

Senkou Span B - light purple dashed line.

Chikou Span - green line.

Bollinger Bands Indicator:

3 yellow lines.

MACD indicator:

Red line and bar graph with white bars in the indicator window.

The material has been provided by InstaForex Company - www.instaforex.com