GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD pair performed a fall to the Fibo level of 61.8% (1.2836), however, there was no rebound from this level of correction. The rebound of quotations from this level will allow us to count on some growth of the pair in the direction of the correction level of 76.4% (1.3044). Fixing the pound/dollar pair under the Fibo level of 61.8% will increase the chances of a further fall in the direction of the correction level of 50.0% (1.2668). A bullish divergence has formed in the CCI indicator, which increases the probability of rebounding from the Fibo level by 61.8%.
The British currency, following the example of the euro, made a return to the correction level of 61.8% (1.2836). What was the reason for this? Yesterday's economic reports concerned only the US dollar and should have created pressure on this currency. It should be recalled once again that the growth of the pound by 700 points in just 7 days was not associated with economic data from the UK or the US. It was based solely on traders' positive expectations regarding the Brexit issue. These expectations have come true only by half, and economic reports by traders of the GBP/USD pair are quietly ignored. Thus, the fall of the pair in recent days is associated with the return to the markets of negative expectations on the issue of Brexit. Boris Johnson failed to implement Brexit as he wanted until October 31, failed to implement a "No Deal" Brexit and may now repeat Theresa May's fate.
I remind you briefly that Theresa May also failed to push her deal through Parliament. Three times, deputies blocked her version of the agreement, called the "Checkers". After that, Theresa May called re-election to parliament and it worsened the position of the conservatives. As a result, she had to leave her post and was replaced by Boris Johnson, who from the very beginning of his reign had a worse position in parliament than Ms. May. He similarly failed to implement Brexit, failed to convince parliament to vote for the agreement, which can be safely called the "Theresa May's Agreement", and now the Prime Minister also wants to hold re-elections to parliament, hoping to increase the number of conservatives and, accordingly, the votes that will unequivocally support his initiatives. However, the effect, as in the case of May, may be the opposite. Now, the name of Boris Johnson is closely associated with Brexit "No Deal". People in the UK probably understand that if the chance to leave the EU without a deal presents itself, then Johnson certainly will not miss it. Thus, voting for conservatives potentially means increasing the chances of Brexit "No Deal". The more 100% of the votes Johnson has at his disposal, the less likely he will be to try to implement Brexit with an agreement. By voting for Labor, the likelihood of a second referendum increases and the likelihood of Brexit's "No Deal" is significantly reduced.
What to expect from the pound/dollar currency pair today?
The pound/dollar pair fell to the correction level of 61.8% once again. I am waiting for quotes to close below this level today, despite the bullish divergence, as I believe that the upward momentum has exhausted itself. There is no information background today, again we will have to follow only the news from UK politics.
The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.
Forecast for GBP/USD and trading recommendations:
I recommend buying the pair with a target of 1.3044 if the rebound from the Fibo level of 61.8% with the stop-loss order below the level of 1.2836 is performed.
I recommend considering selling the pair with the target of 1.2668 if the consolidation under the Fibo level of 61.8% is performed.