GBP/USD: Breakthrough In Brexit Issue

We now have a “wonderful new deal that takes back control,” said British Prime Minister Johnson. The head of the European Commission, Junker, confirmed that the Brexit agreement has been agreed.

“There is a will – there is an agreement, and we have it”, wrote Jean-Claude Juncker, head of the European Commission, on Twitter on Thursday.

“This is a fair agreement, balanced in the interests of the EU and in the interests of the UK, and this is a proof of our commitment to finding solutions”, he said.

The draft Brexit agreement should now be approved by EU leaders, UK and EU parliaments at the summit in Brussels on Thursday and Friday.

According to Boris Johnson, the British parliament should approve Brexit on Saturday.

In anticipation of this event, the pound has strengthened in the past few days. On Thursday, the GBP / USD pair rose again, reaching 1.2987 (a local and 5-month high) at the start of the European session amid a breakthrough in the Brexit negotiations.

The upper border of the descending channel on the weekly chart passes through this mark.

A breakthrough of this resistance level will open the way for the growth of GBP / USD into the zone of resistance levels 1.3100 (EMA144 on the weekly chart), 1.3210 (Fibonacci level 23.6% of the correction to the reduce the GBP / USD pair in a wave that began in July 2014 near the level of 1.7200) , 1.3375 (EMA200 on the weekly chart).

In an alternative scenario, a return to the zone below 1.2625 will indicate the resumption of the bearish trend of GBP / USD. Below the support level of 1.2625, short positions will again become preferable.

Meanwhile, the DXY dollar index is falling on Thursday for the third consecutive week. US companies continue to face the negative effects of a slowdown in global economic growth and uncertainty in international trade, according to the Beige Book, published last Wednesday. This lowers their expectations regarding their own prospects for the next 6-12 months.

Futures on the DXY dollar index is trading at the beginning of today's European session near the level of 97.30. The dollar is pressured by the expectation that the Fed will lower the rate at a meeting in late October. The probability of this event is estimated by investors at about 90%, according to the CME Group (NASDAQ:CME).

Support Levels: 1.2800, 1.2700, 1.2625, 1.2565, 1.2400, 1.2200, 1.2175, 1.2150, 1.2100, 1.2000

Resistance Levels: 1.2987, 1.3100, 1.3210, 1.3375

Trading Scenarios

Sell ​​Stop 1.2745. Stop-Loss 1.2990. Take-Profit 1.2700, 1.2625, 1.2565, 1.2400, 1.2200, 1.2175, 1.2150, 1.2100, 1.2000

Buy Stop 1.2990. Stop-Loss 1.2745. Take-Profit 1.3100, 1.3210, 1.3375

GBPUSD-Weekly

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