Prime Minister Boris Johnson spoke in the House of Commons yesterday, September the 25th. His speech was filled with hostility, which did not go unnoticed in Brussels and with the European Commission. Commission spokeswoman Mina Andreeva told reporters in Brussels “We would remind everybody that respect is a fundamental value in all democracies,” she also added “It is the responsibility of each and every politician to uphold our values. History has shown us what happens when they are not respected.”
The fact that PM Johnson has thus far failed to bridge the gap and smooth out the relationship between parliament and government has sent a tone of pessimism. Winston Churchill’s grandson, Nicholas Soames, who was amongst the 21 conservative MPs removed by PM Johnson after they voted to block a no-deal Brexit, said he was “absolutely appalled by the whole language and tone’’ of the House of Commons.
Some MPы are concerned that PM Johnson may not follow law and request an extension on Brexit if a deal has not been reached before the deadline.
As a result, the British Pound dropped against the greenback to as low as 1.23026. Today, we have had the release of US GDP at a steady 2%, which did not have much of an effect on the USD. However, slightly worse than expected US Initial Jobless Claims report brought GBPUSD back up above the 38.2% Fibo at 1.23509.
With PM Johnson’s reluctance to meet parliament half way, not even in his speeches and expressions regarding no-deal Brexit, the British pound is likely to remain under pressure. The USD regained strength after the White House released a partial transcript of the phone conversation between President D. Trump and President V. Zelensky, which didn’t directly implicate the US President in per quid pro quo.
While the British pound is prone to move down unless we have a Brexit breakthrough, we have to track the latest news regarding President Donald Trumps impeachment.
As for now, we will consider short position when trading GBPUSD. On the 4HTF, the Ichimoku Cloud indicates the bearish bias. On Monday, there was a TK cross down. The price is below the cloud and the Parabolic SAR is pointing down as well.
We want to see the price break the support level around 1.23038 down, with further targets at 50% Fibo 1.22702, followed by 61.8% Fibo at 1.21966.