03.10.201911:11 Forex Analysis & Reviews: Trading strategy for GBP/USD on October 3rd. Boris Johnson is going to suspend Parliament for the second time

GBP/USD – 4H.

As seen on the 4-hour chart, the GBP/USD pair continues to trade near the correction level of 23.6% (1.2293). Yesterday, a downward channel was formed, which shows a short-term trend. Today, a triangle was formed, which shows the trend of the pair over the past few days. To determine the further dynamics of the pound/dollar pair, I recommend waiting for the quotes to exit the formed triangle. If the exit is carried out through the lower border, the probability of a hike in the direction of the level of 1.2014 (low of August 12) will increase significantly. Through the upper – traders will be able to count on some growth in the direction of the correction level of 38.2% (1.2501).

While traders are in thought, Boris Johnson has set out to suspend the UK Parliament for a second time, from October 8 to 14. This time claims to Boris Johnson are much smaller, since a suspension of a week before the new session of Parliament, which will start on October 14 and will begin with the throne speech of Queen Elizabeth II, is normal practice. At least, no one can say that Johnson conceived the second prorogation because of the pursuit of his personal goals, which may interfere with the deputies.

Meanwhile, many EU politicians expressed their skeptical opinion about Boris Johnson's plan for Brexit. Guy Verhofstadt, European Parliamentary Coordinator for Brexit, believes Johnson's new proposal is untenable. It does not reflect London's desire to negotiate but is only formal. According to Verhofstadt, Johnson only wants to shift the blame for the failure with Brexit to the European Union. But the EU's chief negotiator Michel Barnier said: "There is progress, but, frankly, there is still much that needs to be done to achieve the three Backstop goals. This is the absence of borders, the all-Ireland economy and the protection of the single market — that is, the protection of consumers, citizens and businesses within the single market with the 27 EU countries." By and large, this statement means that Johnson's plan is not suitable or requires significant refinement, which in turn requires time for new negotiations. And there is just no time because everything should be decided at the EU summit on October 17-18: either the next postponement or the signing of the agreement.

What to expect from the pound/dollar currency pair today?

The pound/dollar pair is still trading inside the downward channel and the tapering triangle. Thus, I am first of all waiting for the quotes to exit the triangle. We take into account the information background on Thursday, October 3, as the indices of business activity in the services sectors of the UK and the US will be released. And of course, do not lose sight of any news relating to Brexit. As you can see, news from Boris Johnson, from his party or European politicians comes every day.

The Fibo grid is based on the extremes of March 13, 2019, and September 3, 2019.

Forecast for GBP/USD and trading recommendations:

I do not recommend buying the pair shortly, as the information background is now hardly positive for the pound.

I recommend considering new sales of the pair with the target of 1.2014, if a new close is made under the level of 23.6%, with the stop-loss order above the level of 1.2308, with the simultaneous exit of the pair quotes through the lower border of the tapering triangle.