Trading strategy for GBP/USD on November 7th. Boris Johnson warns electorate of two referendums

Trading 07 nov 2019 Donner votre avis

GBP/USD – 4H.

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As seen on the 4-hour chart, the GBP/USD pair performed a fall to the correction level of 61.8% (1.2836) and the lower line of the narrowing channel. The rebound of quotes from the Fibo level of 61.8% will allow traders to count on a reversal in favor of the British currency and some growth in the direction of the upper line of the narrowing channel. Closing the pound/dollar pair under the correction level of 61.8% will significantly increase the chances of a further decline in the direction of the next Fibo level of 50.0% (1.2668).

All UK parties have begun official preparations for elections in December and it's time to listen to their election promises. Of course, the most attention is focused on the conservatives. Firstly, they are now represented in parliament by a majority. Secondly, the fate of Brexit will depend on their victory or defeat in the elections. The main trump card of the Conservative Party is the prospect of an early exit from the European Union. If the 52% who voted "yes" to leave the EU in 2016 have not yet changed their decision, then all is well for the conservatives. All those who want to leave the European Union as soon as possible will probably vote for them. However, this is precisely the question of the main doubt in the victory of the conservatives and certainly in the victory of the conservatives with the necessary majority. After all, three years have passed, and "things are still there." A certain part of the population of the UK could already just get tired of Brexit with all its negative consequences even before Brexit. But then it will only get worse. The last three years can be called the general and easy rehearsal of the life of Great Britain after leaving the EU. And there is the reason to believe that some residents of the country no longer want to leave the European Union at all costs. And if so, then not everyone who supported Brexit in 2016 will vote for the conservatives. Boris Johnson himself said, speaking to his residences, the following:

"I don't want early elections and hardly anyone would like them in December. But we concluded that we had no choice – the work of our parliament is paralyzed, it is stuck in a quagmire. I've gotten to the point where I desperately want to chew on my tie because in a way we're very close to it." Johnson also said that he would ratify the Brexit agreement immediately if he returned to power by December. How he intends to do this, if the balance of power in the Parliament does not change, is not specified by the Prime Minister. In general, everything is as always. Many promises, many high-profile statements, the main thing is to achieve the maximum number of votes in the elections. And later, after the phrases "I'd rather die in a ditch than ask the European Union about another postponement", you can always say "sorry, it didn't work out" and give a bunch of new promises. Also, Boris Johnson noted that in the event of a defeat in the election, the inhabitants of the UK will wait for two new referendums, one of which will concern the independence of Scotland.

Forecast for GBP/USD and trading recommendations:

The pound/dollar pair still maintains growth prospects in the direction of the correction level of 76.4% (1.3044), while it is above the level of 61.8%. Today, I expect the pair to either rebound from the lower line of the channel or the level of 61.8%. If this does not happen, the bear traders will be activated, and the pound will again be subject to sales with a target of 50.0% (1.2668). The information background for the pair today will be interesting, as the results of the meeting of the Bank of England are scheduled for today. Although traders do not expect any changes in monetary policy, this event deserves attention. So was the press conference with Mark Carney.

The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.

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

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