GBP/USD. November 4. Results of the day. Even the second ardent supporter of Brexit, Nigel Farage, opposes Boris Johnson

Trading 05 nov 2019 Donner votre avis

4-hour timeframe

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Amplitude of the last 5 days (high-low): 64p - 98p - 63p - 76p - 46p.

Average volatility over the past 5 days: 69p (average).

Monday, November 4, was a very calm trading day for the GBP/USD currency pair. There were few macroeconomic publications today, only two. The index of business activity in the UK construction sector amounted to 44.2, exceeding both the forecast and the previous value. However, in fact, this increase does not change anything, since 44.2 is much lower than the key value of 50.0. We already wrote about the US manufacturing orders

in our review for the EUR/USD pair. Thus, the pound continued to move towards the critical line during the day with low volatility. Formally, the volatility over the past five days is characterized as average, but for the pound sterling 60-70 points from the low to the high of the day is very small. Especially against the background of those 800 points in literally a week that the pair recently went up. But now there is practically no news from the UK. But there is talk and discussion.

By and large, everyone now, from ordinary workers to billionaires, is discussing the possible results of the December 12 elections, all as one, note their extreme degree of significance. In fact, based on the results of these elections, it will be possible to say what the outcome of Brexit awaits Britain. By the way, it is not necessary that there will be any outcome at all, since a distribution of votes is possible in which no party will have the necessary majority, even taking into account friendly parties and deputies. Such a picture is now seen in Parliament. Meanwhile, most media outlets and periodicals insist that the Conservatives have the highest political ratings, and it is precisely their victory that needs to be prepared in the elections. In principle, this is expected, but the question is still the same: with what advantage will the Conservatives win? The Laborites are likely to get around 25-30% of the seat in Parliament, the party of Nigel Faraj, the initiator of Brexit, is not going to enter into a coalition with Conservatives and will take away another 10-10% of the vote. The Brexit party that supports the hard scenario deems Boris Johnson's current version of the deal as "treacherous".

Meanwhile, UK billionaires are preparing to leave the country if the Labour Party wins the election and Jeremy Corbyn becomes prime minister. It is expected that in the case of coming to power, Corbyn will significantly increase taxes for the rich and generally adhere to the opinion about the need for stronger government intervention in the country's economy. Well, Jeremy Corbyn himself already managed to "answer" to Donald Trump, who actively votes for Nigel Faraj and Boris Johnson in the elections, considering Corbyn himself a "second-class politician". Labour leader accused the American president of interfering in the British parliamentary elections with a view to electing his friend Boris Johnson. Earlier, US leader Trump criticized Boris Johnson's deal with the European Union, stressing that it could put an end to reaching a trade deal with the United States. In general, each side bends its line, even Donald Trump has his own interests in the UK and Brexit, and the UK itself remains now a theater of political battles and confrontations.

The technical picture of the pound now indicates an upward trend, however, it is definitely impossible to call it strong. Most likely, the bulls have exhausted their potential, and just as Brexit was paused, their desire to buy the British currency also disappeared amid new uncertainty, this time related to the new parliamentary elections. Bears are not active yet, but it seems that this will happen in the near future, since the hard Brexit, although removed from the near future and even Johnson stopped talking about it, nevertheless, the UK still has problems and its "divorce" with the EU can't be solved at all and it doesn't even move towards a solution.

Trading recommendations:

GBP/USD is in a downward correction. Thus, it is best now to wait for the situation to be clarified, the low volatility segment of the trend to complete, or at least to complete the current round of correction. Long positions still remain relevant with the target at a resistance level of 1,3005 if the pound/dollar pair stays above the Kijun-sen line of the Ichimoku indicator. It is recommended to consider buying the US currency in case of overcoming all the lines of the Ichimoku indicator and the level of 1.2836.

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 indicators 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 movement options:

Red and green arrows.

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

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