November 18-22. Unstable stability in England

2019-11-17

On Friday, November 15, the British pound strengthened slightly and even a third wave formed upward on GBPUSD, on the H4 timeframe, which indicates the presence of an uptrend.

However, there is no reason to continue strengthening the British currency other than the market expectations for Brexit. That is, it is difficult to even imagine how strongly most traders believe in a successful Brexit outcome on January 31? If they believe strongly, then the pound may continue to strengthen. However, we still believe that the strengthening of the British currency will be either extremely restrained or absent altogether. Since Brexit by and large remains in limbo and will remain so at least until December 12, it is unlikely that for almost a month the British currency will grow solely on the positive expectations of traders. Moreover, sooner or later, traders will “remember” that the last five most important reports from the UK were completely disastrous. They will also “remember” that two members of the Bank of England monetary committee voted “in favor” of lowering the rate, which means that at the next meeting their number may increase to 3-4. And five votes is enough for the rate to be lowered. Of course, an event such as monetary easing, traders can also ignore. But turning a blind eye to such events will always fail.

Based on the foregoing, we can assume that until December 12, the pound will not be prone to strong growth, but its strengthening is allowed, since it will not be possible to predict the majority mood in the market over the next month. In any case, a strong strengthening of the pound is not expected.