GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD currency pair has completed the consolidation under the upward channel and continues to decline after the rebound from the correctional level of 38.2% (1.2501). In the next few hours, the EUR/USD pair can work out the level of 1.2308. Fixing the pair's rate under the Fibo level of 23.6% (1.2293) will significantly increase the chances of a further drop in the quotes towards the level of 1.2014. Today, the divergence is not observed in any indicator.
What is happening in the UK, or rather in the walls of Parliament, causes both laughter and tears at the same time. The first working day of Parliament after the Court decided to cancel the suspension of deputies almost ended in scandal. Boris Johnson received sarcastic applause in Parliament, a lot of angry shouts of opposition deputies and a batch of new calls to resign after he proposed a vote of no confidence. I don't think this has ever happened in British history. Johnson's position is clear. The Prime Minister wants to achieve parliamentary re-elections, as he believes that his party will be able to increase the number of deputies in Parliament. The opposition understands this plan of Johnson and refuses to accept the offer of the Prime Minister about re-elections. And a possible vote of no confidence, which Johnson is not at all afraid of, can just provoke the holding of parliamentary elections, since, according to the legislation of the United Kingdom, after a vote is passed, deputies can form a coalition government, but again with the approval of the majority of members of Parliament. That is, the chances of its creation are extremely small, given the level of fragmentation of the opinions of politicians. Thus, a vote of no confidence can end simply by re-election to Parliament, which Johnson wants to achieve. Deputies understand this and want Johnson to first postpone Brexit until January 31, following the bill, and after that, they are ready to support the idea of re-election.
Thus, the parties continue to fight, while Brexit is not approaching its final by an inch. By the way, time is now playing against Boris Johnson. October will begin soon, and there is not far off the EU summit on October 17-18, at which the Prime Minister must ask for a delay if he fails to reach an agreement with Brussels. Traders do not doubt that it will not be possible to sign a deal with the EU.
The pound against the backdrop of new political wars and confusion began to fall, as traders lose faith in a positive outcome. Even if a new Brexit delay is granted by the EU, what will it change? If re-elections to Parliament take place and the Conservative Party can increase its presence, it will mean that the opposition will not be able to prevent Johnson from implementing Brexit "No Deal".
What to expect from the pound/dollar currency pair today?
The pound/dollar pair continues the process of falling in the direction of the Fibo level of 23.6% (1.2293). The rebound of quotations from this level will allow counting on some growth, and consolidation under – to expect further fall. Today will be a significant speech by the Governor of the Bank of England Mark Carney, who can comment on Brexit. The information is potentially very interesting.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
Forecast for GBP/USD and trading recommendations:
I do not recommend buying a pair soon, as traders began active sales again.
I recommend considering the new sales of the pair with a target of 1.2014 if a close is performed under the level of 23.6%, with the stop-loss order above the level of 1.2308.