30.11.202014:29 Forex Analysis & Reviews: GBPUSD. Investment outflow and start of the decisive week according to Brexit

The last trading week ended when the market reduced activity, and the online negotiations on Brexit did not give the desired result, as a result of which the main negotiator from the European Union, together with his team, went to London to resolve the issue of the deal.

If we proceed from the closed meeting with the members of the European Parliament last Friday, then the negotiating groups have time until Wednesday, December 2, because if the process of agreeing on the deal is further delayed, the European Parliament will have no time to ratify the agreement.

Both European and British officials believe that a Brexit trade deal could be reached within days if both parties continue to work "in good faith." In simple terms, the parties expect decisive steps from each other in terms of concessions on key issues: access to British territorial waters and fair competition in compliance with European standards.

In an interview with the BBC, Foreign Secretary Dominic Raab called on the European Union to recognize that regaining control of British waters is a matter of British sovereignty.

The British side is demanding repatriation of 80% of the EU's current catch in British waters, which, in its opinion, is exorbitant. In turn, the European side is ready to return to the British from 15 to 18% of the catch to settle the fishing issue, but the British delegation calls this proposal "ridiculous."

So the negotiations revolve week after week around the same issues, while frightened investors do not know what to expect in the new year.

According to a report by EY consultancy, major financial companies are determined to avoid investing in UK businesses next year due to Brexit uncertainty and the COVID-19 pandemic.

The poll showed that only three years later, investors are ready to return to considering investing in British businesses.

Following from the above material, the pound sterling is not in the best position, taking into account its growth in the period of eight months by more than 1900 points (15.5%). In theory, the pound, driven by speculation, can turn around quickly, which will lead to a downward inertial move.

In terms of technical analysis, there is a characteristic sideways movement between the price levels of 1.3300 and 1.3400. A consistent rebound of the price from the set boundaries has developed a regular basis in the market, which leads to a systematic crossing of trading volumes when approaching the levels of 1.3300 and 1.3400.

At first glance, the side channel may seem wide, but this is just an illusion, with a high probability we are faced with a cumulative process, where speculators are only waiting for signals from the Brexit fields to set the pace in the market in the form of inertia.

As for the market dynamics for November 27, everything is exactly the same as in the market, a slowdown without unnecessary emotions. The average for the week was 95, which is almost equal to the width of the side channel.

Looking at the trading chart in general terms (daily period), you can see that the quote moves at the peak of the upward movement from September 24. In fact, the downward trend in the first half of September has been won back, and less than 200 points are left to renew the maximum of the medium-term upward trend.

Based on the published data on the UK lending market on the economic calendar on Monday, the volume of mortgage lending will grow by £ 4.29 billion. In the previous month, it rose by £ 4.8 billion. The number of approved mortgage loans amounted to 97,530, while the expectation was 84,490, which is pretty good. Consumer lending fell £ 0.600 billion.

There was no market reaction at the time of publication of the data.

At 15:00 UTC, the publication of the unfinished sales index in the United States real estate market is expected, where it is predicted to grow by 1.0% for the month of October.

Analyzing the current trading chart, you can see that market participants, as before, are in the sideways channel range of 1.3300 / 1.3400, consistently working out the set boundaries.

Taking into account that the range has acquired the shape of a channel, it is possible to add additional lines to the chart in the form of 50% and 10% deviation.

Until the borders have been broken through, trading is conducted on the basis of a logical basis, that is, on a rebound. The main acceleration will occur after the price has kept outside the established boundaries, in the H4 period.

Indicator analysis

Analyzing different sectors of time frames (TF), it can be seen that the indicators of technical instruments on the minute and hour periods follow the trajectory of the side channel, in this case, signaling a buy. The daily period works on a general upward movement, signaling a buy.

Weekly volatility / Volatility measurement: Month; Quarter; Year

Measurement of volatility reflects the average daily fluctuation, calculated per Month / Quarter / Year.

(November 30 was built taking into account the publication time of the article)

The dynamics of the current time is 58 points, which is 51% below the average. The main acceleration is expected after the breakdown of one or another border of the range, which is likely to coincide with the flow of news on Brexit.

Key levels

Resistance zones: 1.3400 *; 1.3480; 1.3600; 1.3850; 1.4000 ***; 1.4350 **.

Support Zones: 1.3300 **; 1.3175 (1.3200); 1.3000 ***; 1.2840 / 1.2860 / 1.2885; 1.2770 **; 1.2620; 1.2500; 1.2350 **; 1.2250; 1.2150 **; 1.2000 *** (1.1957).

* Periodic level

** Range level

*** Psychological level