4-hour timeframe

Technical data:

The upper linear regression channel: direction – down.

The lower linear regression channel: direction – sideways.

The moving average (20; smoothed) – up.

CCI: 87.5075

Despite the fact that the topic of Brexit is already rather fed up, it will remain the main one until the end of the UK's withdrawal from the EU. However, the political situation in the country gets more and more confused every day, which is directly related to Brexit and its prospects. The main problem of Britain is in the political sphere, and there is no unity in views on the "divorce" from the EU. The whole situation in the country can now be described in just a few theses:

1) The country's Parliament does not want a "hard" Brexit scenario.

2) Boris Johnson – the leader of the race for the post of Prime Minister and head of the Conservative Party – supports the "hard" Brexit.

3) There is very little time to hold new negotiations with the EU (no more than 3 months), as Johnson insists on leaving on October 31 and not a day later.

4) The Parliament allows a new transfer of Brexit, the main thing is to avoid a "hard" scenario.

5) Johnson wants new conditions of a "deal" with Brussels, the European Union has refused new negotiations.

6) Johnson, in the event of a refusal to negotiate, the EU may refuse to pay 50 billion euros in compensation for leaving London.

7) Laborites want to hold a second referendum in which the fate of Brexit will be decided by the people of the country.

8) In the case of "hard" Brexit, Scotland is ready to initiate a referendum on independence, as it does not support the exit from the EU as a whole.

Given all 8 points, what certainty in the future of the UK (and the pound sterling) can we talk about now? The pound sterling miraculously managed to improve its position in the pair with the US currency in recent weeks and then, only thanks to the States themselves, which frankly failed all the packages of macroeconomic statistics.

Nearest support levels:

S1 – 1.2695

S2 – 1.2634

S3 – 1.2573

Nearest resistance levels:

R1 – 1.2756

R2 – 1.2817

Trading recommendations:

The GBP/USD pair continues not a too strong upward movement but failed to overcome the level of 1.2756 for the third time. We recommend extremely cautious purchases of the pound sterling with a target of 1.2817 if the bulls manage to gain a foothold above 1.2756.

It will be possible to sell the pair pound/dollar not earlier than re-consolidation under the moving average with targets at 1.2634 and 1.2573. In this case, a resumption of the downward trend is possible.

In addition to the technical picture should also take into account the fundamental data and the time of their release.

Explanation of illustrations:

The upper linear regression channel – the blue line of the unidirectional movement.

The lower linear regression channel – purple line unidirectional movement.

CCI – the blue line in the indicator regression window.

The moving average (20; smoothed) is the blue line on the price chart.

Murray levels – multi-colored horizontal stripes.

Heiken Ashi is an indicator that colors bars in blue or purple.