GBP/USD. November 5. Results of the day. The dissolution of the UK Parliament will take place tomorrow. The news calm begins

4-hour timeframe

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Amplitude of the last 5 days (high-low): 98p - 63p - 76p - 46p - 67p.

Average volatility over the past 5 days: 70p (average).

Tuesday, November 5th, passed for the GBP/USD pair in the same low-volatility movement as Monday, like the whole previous week. After the pair surged by 800 points, volatility sharply fell and now, although it is about 70 points a day, this is clearly not enough to form a new trend. There is still a low downward trend, but at the moment it is clearly not enough to start downward trading. The pair with grief fell in half below the Kijun-sen line and is now trying to overcome the Ichimoku cloud, which, in theory, will allow us to consider sell orders. At the same time, Bollinger Bands are more laterally directed than down, which preserves the possibility of lateral movement.

The fundamental background for the British currency is now reduced to news from overseas, to which, by the way, traders are not too willing to respond. For example, today's indexes of business activity in the US services sector remained, by and large, was ignored by traders. As for Britain itself, the fundamental calm has been maintained there for the past two weeks. For all this time, only business activity indices in the sphere of production, services and construction were published. Today the last of these three indices was published - in the service sector - it amounted to 50.0, which, however, also did not render any support to the British currency. We believe that the next five weeks will go in a moderately downward movement for the pound/dollar pair. There will be very little news on Brexit, but there will be a lot of political agitation, skirmishes, debates, and more. Actually, they have already begun. Boris Johnson called on Labour leader Jeremy Corbyn to dot the "and" and clearly state what kind of Brexit he and his party members want? What option will Corbyn adhere to if not a single party in the election succeeds in obtaining the necessary majority of votes? "For months, you tried to avoid explaining what your Brexit plan was, and instead spent a lot of time and energy on undermining the negotiations," Johnson said in an open letter to Corbyn. In addition, the leader of the Conservative Party suspects Corbyn of wanting to cancel his deal and sign his own. Of course, for this Jeremy Corbyn will need an unconditional victory in the election, but any options should be considered.

Well, the EU is now expecting complex negotiations on a trade deal after Brexit. This was stated by EU negotiator for Brexit Michel Barnier. "Britain should not think that a zero tariff, zero quotas will be enough," he said. Barnier also believes that a "hard" Brexit is still possible, so you need to be prepared for absolutely any outcome. Moreover, nobody knows the results of the December 12 elections.

We believe that after Brexit was pushed back for several months, the reasons for buying the pound again disappeared. So it has been repeatedly in the last three years of the saga of Brexit. If any favorable news, or even rumors, appeared, the pound showed growth. However, when the rumors were not confirmed, and the news was blocked by other negative data, the downward movement of the GBP/USD pair resumed with renewed vigor. Usually this led to updating lows. Tomorrow the calendar of macroeconomic events in the UK is again empty, but even on Thursday, when the results of the meeting of the Bank of England will be summed up, no high-profile statements and interesting news are expected. The British regulator is likely to leave the key rate unchanged, as well as the volume of asset buybacks from the open market. Mark Carney's speech will be the only thing of interest, in which traders will try to see and hear hints of lowering the key rate in the near future.

Trading recommendations:

GBP/USD is in a downward correction. Thus, it's best to wait for the wait for the clarification of the situation, until the low volatility segment of the trend ends. Long positions have lost their relevance, as the pair has consolidated below the critical line. However, any position now carries increased risks due to the obviously flat movement of the pair. Below the level of 1.2808, the chances of a downward trend will increase, and then we recommend considering to sell the pound.

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.

Support / Resistance Classic Levels:

Red and gray dotted lines with price symbols.

Pivot Level:

Yellow solid line.

Volatility Support / Resistance Levels:

Gray dotted lines without price designations.

Possible price movements:

Red and green arrows.

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