Last week was a real shock for the British pound and the UK. A week earlier, information began to arrive that Liz Truss could be dismissed due to the failure of plans to reduce taxes, which led to a sharp increase in treasury bond yields and the collapse of the pound to historic lows. However, at the beginning of last week, Truss announced that she would not resign from her post, and by the end of the week, she resigned without waiting for the moment when she would be given a vote of no confidence. Against the background of these events, the British pound was moving very actively but without a clear direction. However, it doesn't matter now why Truss decided to resign herself. Now it is important who will become the new Prime Minister of Great Britain.
I cannot say that the future depends on these elections for the British. However, we have all seen how Liz Truss and her poorly developed economic plans led to monstrous consequences for the pound. Therefore, elections are still important for the national currency. As of Monday morning, there are only two official candidates for the post of Prime Minister - Rishi Sunak and Boris Johnson. Both have already passed the required threshold of 100 votes of support from the Tories, but both have not yet officially announced their intention to run. However, Boris Johnson interrupted his vacation in the Dominican Republic for the sake of the election and returned to London. He will participate in the elections. The same goes for Rishi Sunak, who lost the last election only in the last round. The Conservatives have 357 parliamentary seats in total. Therefore, the maximum number of official participants in the race can be three. The third could be Penny Mordaunt. She has not yet secured the support of the required 100 conservatives, but she was the first to declare her desire to participate in the elections. Experts believe she is an outsider in the race and may not even get the required 100 votes.
In my opinion, a fight will develop between Sunak and Johnson. The fact that he served as Finance Minister and has strong support in Parliament speaks in favor of Sunak. However, he lost the last election because of the "dark history" with his wife's taxes, who owns a large stake in her father's Indian company and received more than 10 million in dividends last year. Still, he did not pay a cent to the British treasury due to her non-resident status. Of course, this is not the only reason for Sunak's defeat, but one of them.
Boris Johnson also has strong support within the party, but it should be remembered that the same party dismissed him this summer. So far, it isn't easy to believe that the Conservatives will again elect Johnson as their leader. He has already been Prime minister for several years and is remembered by many, not for his decisions but for many scandals involving him. However, Johnson is more popular among the British, which is important in the run-up to the general parliamentary elections. The Conservatives may lose with a weak and uncharismatic leader. From my point of view, the chances of Sunak and Johnson are 50-50.
The wave pattern of the pound/dollar instrument assumes the construction of a new upward trend segment. Thus, I advise buying the instrument on the MACD reversals "up" with targets near the estimated mark of 1.1705, equating to 161.8% Fibonacci. It would be best if you were careful with sales and purchases since the downward section of the trend may become more complicated.