GBP / USD – 4 H.
On October 4, the GBP / USD pair pushed off the correction level of 61.8% – 1.2836 on the 4-hour chart and resumed the growth process in the direction of the next correctional level of 76.4% – 1.3044. The softening of the Fed’s policy, which traders learned last night, slightly increased demand for the British pound, and the main theme for which remains “on pause”. However, how long will the pound continue to grow, given the fact that Brexit, by and large, does not approach its final stage, which is the UK’s exit from the EU?
Today, let’s start with economic reports. In Britain, complete information silence remains. No news, except on the topic of Brexit, is received by traders. In America, the situation is slightly better. Yesterday, the third quarter GDP came out in a preliminary estimate, and these figures were significantly higher than negative forecasts. The final value of US GDP in the third quarter is expected to be no lower than 1.9%, while the forecast was only 1.6% y / y. This is good news for the dollar and for bear traders. If the US economy continues to show its resilience and stability, the Fed will no longer need to resort to lowering the key rate. Accordingly, the American currency will be able to climb to the throne once again. And for the British pound, everything still depends on the Brexit outcome. Now, traders are waiting for the election results on December 12. If you consider the last three years in detail, then traders are constantly waiting for something, since Brexit is constantly being postponed, there is no consensus in the Parliament, constant political changes, re-elections, votes of no confidence, and resignations of high-ranking officials. In general, chaos. Therefore, the next chapter of this series should be completed in December, when it will become clear how many deputy mandates the conservatives will receive and how many Labor. It will depend on this whether Boris Johnson succeeds in realizing what he became Prime Minister for, or whether Brexit ends in the most miserable way for himself – a second referendum and cancellation.
By the way, it is the repeated referendum that is being talked about more and more often by the media, political scientists, and residents of Great Britain. In turn, Labor leader Jeremy Corbyn sees future elections as a great springboard to transform the country. Brexit, according to Corbyn, can still be canceled, respectively, to avoid a severe blow to the economy of the kingdom. The effect of which will continue for many years to come. In addition, Corbyn believes that the era of conservative rule should end. “For many years, conservatives have reduced funding for vital services and provided tax incentives for the super-rich, it’s time for real change,” said Jeremy Corbyn. The opposition leader also said: “We will complete Brexit within six months, giving people the right to make a choice between leaving on reasonable terms and maintaining membership.” His idea is to follow the will of the people, who, perhaps, within three years have already changed their minds to leave the EU. On the contrary, Johnson insists on the need to exit the EU, according to the 2016 referendum.
What to expect today from the pound-dollar currency pair?
The pound-dollar pair continues the growth process in the direction of the correctional level of 76.4% – 1.3044. Today, I am expecting just the continuation of moderate growth, since the information background will be extremely weak again. That is, it will not be able to prevent bull traders from buying a pair. At the same time, going above 1.3044 will be extremely difficult.
The Fibo grid was built at the extremes of March 13, 2019 and September 3, 2019.
GBP / USD Forecast and recommendations for traders:
I recommend buying a pair with a target of 1.3044, since it closed at 61.8% with a Stop Loss of 1.2836.
I recommend considering the sales of the pair with the target of 1.2668 if consolidation under the last low of bullish divergence is completed.