Fundamental analytics

GBP/USD

GBPUSD

GBP / USD is adjusted after the yesterday renewing of the highs in more than eight months of trading during Thursday session.  

The main driver for the quotation growth was the results of the last voting in the British Parliament which was rejected by a majority of votes with exit from the EU without an agreement on March 29 of the current year. It is noteworthy that this voting does not exclude the possibility of UK exit without an agreement at any other time, as the Prime Minister of the country Theresa May said yesterday.

Most investors are confident that today the parliament will vote to postpone Brexit but this decision will not be final since all 27 EU countries members must approve this request as well. It is expected that the decision will be made during the summit which is held next week in Brussels. Today it became known that the chairman of the European Council Donald Tusk appealed to the EU members to consider the option of a prolonged postponement of Brexit which would be enough to revise the UK’s position on the Brexit issue and agree on all disputing issues. This statement is completely contrary to the comments of Theresa May she gave the day before noting that the postponement will be very short in time.

As we see yesterday’s voting did not bring much clarity to the situation with Brexit which could put considerable pressure on the British currency. Many experts believe that the proposal for a prolonged postponement of Brexit by the EU can strengthen the position of prime minister May inside the country since many deputies intend to complete the first stage of the UK exit from the EU as soon as possible. This morning there were also reports stating the new May draft agreement is ready to support the Northern Ireland Duo Party but this information has not received official confirmation so far .

As to our opinion the growing uncertainty will exert very strong pressure on the British currency even despite the country's possible approval by the parliament on the option with a Brexit delay.

The signals of technical analysis also demonstrate a high probability of the formation of a significant rolling movement by GBP / USD. The day before, the pair has updated local maximum above which the currency has not crossed for more than eight months. An attempt to overcome the range of 1.3350 ended up with a false breakdown which is a very strong reversal signal within which a decrease in quotations in the range of ​​1.3050 is expected.

· Resistance levels: 1.3350, 1.3300, 1.3270;

· Supportive levels: 1.3200, 1.3050, 1.3000.

The main scenario is a decline to 1.3050.

An alternative option is fixing above 1.3250 and crossing to 1.3350.

The fundamental background for this contract remains ambiguous as there are quite strong signals on the chart indicating price reversals. Therefore, today the priority is to give short positions that can be viewed from levels 1.3270 and 1.3300.