FX.co ★ Forecast for EUR/USD and GBP/USD on August 30th. Opponents of Brexit "No Deal" waving their fists after a fight

EUR/USD – 4H.

As seen on the 4-hour chart, the EUR/USD pair continues the process of falling in the direction of the correction level of 127.2% (1.1025). Traders continue to observe the events in the UK, leaving the European Union and the United States in the shadows, and the euro/dollar pair with them. Due to the reduced interest, the euro/dollar pair has been very reluctant in recent days, the activity of traders on this pair is low. There have been few economic reports in recent days. Yesterday, for example, the report on GDP for the second quarter in America is higher, according to which the main indicator fell from 2.1% to 2.0% y/y, but this is not the final value. The same was true for several other reports from the United States. Today, I am waiting for the inflation report (also a preliminary value) in the European Union, as this indicator will be one of the main in determining changes in the monetary policy of the ECB at the next meeting. Although according to many experts, the easing of the ECB policy – the issue has already been resolved, as inflation has been falling for several months in a row, geopolitical risks are growing, the situation in the UK is growing more every day, and the successful overcoming of the US-China trade crisis in the near future was only believed by outspoken optimists. Nevertheless, the new decline in inflation will cause even more frustration of the forex currency market, and the demand for the euro will fall again.

What to expect from the currency pair on Friday?

On August 30, I expect a further systematic decline of the euro/dollar pair towards the level of 1.1025. The closure of the rate pairs under the correction level of 127.2% work in favor of the continuation of the falling of quotations in the direction of the next correctional level of 161.8% (1.0920). The fundamental component, in my opinion, can only support the dollar today. Inflation in the EU is unlikely to accelerate, several economic reports in America (on changes in spending and income) are not the main ones, moreover, they are not expected to reduce, therefore, the foundation is unlikely to put pressure on the US dollar today.

The Fibo grid is built on the extremes of May 23, 2019, and June 25, 2019.

Forecast for EUR/USD and trading recommendations:

I recommend buying a pair with a target of 1.1107 if the pair rebounds from a correction level of 127.2%.

Until the rebound from the level of 1.1025, I recommend remaining in the sales of the EUR/USD pair with a target of 1.1025.

GBP/USD – 4H.

British Prime Minister Boris Johnson made his " knight's move." More precisely, the "move of the horse" with the help of the Queen. How did the opposition and the public respond? The opposition led by Jeremy Corbyn was outraged to the limit, immediately a huge number of politicians gave interviews, which called Johnson's act "undemocratic", "outright lawlessness", and Johnson himself "a puppet of Donald Trump." The public immediately began to organize rallies against Brexit "No Deal" against the forced vacation of the Parliament and to sign a petition "against the 5-week break of the Parliament", which gained 10 times more signatures in a matter of hours than required for parliament to consider it. However, what is the point of all this? Parliament has about 6 days now to do something that will stop Boris Johnson, stop the dissolution of Parliament, stop Brexit "No Deal." But even hypothetically, it is difficult to imagine what the opposition can do. Many are now talking about a vote of confidence. However, it will not be announced until September 3, and even if it is supported by a majority of MPs, it is not an "order" for the Prime Minister to resign immediately. This is like a proposal for a voluntary resignation due to dissatisfaction of the parliament. Queen Elizabeth II can formally dismiss Johnson, but for the past 200 years, such a precedent has not happened. It turns out that there are ghostly chances to remove Johnson from his duties, but they are so ghostly that they do not want to even consider. The chances of stopping "Brexit" are there, but they are too small to be optimistic about the future. So far, the British pound keeps the correction level of 127.2% (1.2180) from the new fall, but I do not think that it will become a serious obstacle.

What to expect from the currency pair on Friday?

I do not see even hypothetical reasons for the growth of the pound on August 30. For traders to start buying the pound, Boris Johnson must resign within the next 2-3 hours, which, of course, will not happen. Economic reports in the UK will not be published today. The work of the Parliament will resume only on September 3, which means that it is not worth waiting for retaliatory steps from the opposition earlier than this date. Thus, closing the pound/dollar pair below the Fibo level of 127.2% will increase the likelihood of a further fall towards the next correction level of 161.8% (1.1853).

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

Forecast for GBP/USD and trading recommendations:

I recommend buying the pair very carefully (or not buying at all) with a target of 1.2437, with the stop-loss order below the level of 1.2180 if a new rebound from the level of 127.2% is made.

I recommend selling a pair with the target of 1.1853 and with a stop-loss order above the level of 127.2% if the closing is closed under the level of 1.2180.