GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD pair has completed a return to the retracement level of 38.2% (1.2501), rebounding from this level and reversing in favor of the US dollar. The upward channel is slightly rebuilt, the angle of inclination has changed, new reference points have been taken into account. However, given the pair's rebound from the Fibo level of 38.2%, the probability of a new fall in the direction of the correction level of 23.6% (1.2293) is very high. But before that, I recommend waiting for the closing of the pound/dollar pair under the channel.
The information background for the GBP/USD pair in recent days is purely political. The article on EUR/USD details the political upheavals of Donald Trump; this article highlights Boris Johnson's two-month political career as Prime Minister of Great Britain.
These two politicians are extremely similar, openly showing a good attitude to each other. Both face impeachment (in the case of Johnson – a vote of no confidence, but the essence is the same). After Boris Johnson lost the court case on the suspension of the work of Parliament, the question remains whether to issue him a vote of no confidence. Yesterday, immediately after the announcement of the results of the High Court hearing, Jeremy Corbyn, the leader of the Labor Party, spoke openly and urged Johnson to resign. There were rumors of a vote of no confidence even before the so-called prorogation. However, then the Parliament was afraid to start this procedure, because, according to British law, a vote of no confidence is not an order to leave office, but only an expression of the desire of Parliament. That is, Boris Johnson can safely not accept the vote and remain in office. However, the process of removing the Prime Minister from his post (as well as the President in the United States) is very long and complicated. It consists of many parts of the overall "puzzle". And a vote of no confidence could be one of those parts. Another question is that the vote of no confidence may end with early parliamentary elections, which the deputies themselves did not want to hold twice. It is the early parliamentary elections that the Parliament itself fears, and it is for this reason that the vote may again be delayed. However, I consider it necessary to recall that if such an issue as a vote of no confidence is raised in the UK Parliament at all, the probability that everything will end with the resignation of the Prime Minister is high. Theresa May twice passed a vote, ended with the resignation. These are the realities in the time of Brexit.
I also want to note that even a process such as the offset of Boris Johnson from office, is now considered by traders exclusively through the prism of a Brexit. That is, traders are interested in, first of all, not Johnson, but Brexit, and this is logical. The farther Brexit "No Deal", the better for the pound. Thus, Johnson's defeat, a vote of no confidence in him, any pressure on him and calls to resign are positive news for the pound. But they must also be supported by the concrete actions of opposing forces.
What to expect from the pound/dollar currency pair today?
The pound/dollar pair has fulfilled the rebound from the level of 38.2% (1.2501). Thus, today I expect a resumption of the fall in the direction of the corrective level of 23.6% (1.2293). There will be no economic reports in the UK again today, but the information background may still be saturated due to political events in the country.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
Forecast for GBP/USD and trading recommendations:
I recommend buying the pair with the target of 1.2668 and a stop-loss order under the level of 1.2501 if a new close is performed above the Fibo level of 38.2%.
I recommend considering selling a pair with a target of 1.2308 now with targets in the range of 1.2308 – 1.2293, with a stop-loss level of 38.2% (Fibonacci). You can wait for the closure under the upward channel.