29th August 2019 - What?

Walid Salah Eldin

Active member
205 1
What Boris Johnson did is putting UK in a real critical situation and He came out saying there is enough time to discuss Brexit by the agreed deadline to split on Oct. 31!

Boris Johnson avoided in his video speech this time saying "The Democracy" word he repeated several times Before.



As he has just limited it by capping PMs' ability to tackle his own plan to take UK out of EU by having Queen Elizabeth II approval to suspend Parliament from Sep. 3 to Oct. 9 paving the way for very hard Brexit.

After he made her in a difficult situation choosing between whether to say no and then it will be blamed for not letting UK leaving EU or to say yes and then She is to be going along with Boris in his plan to mute the parliament members who have been elected for discussing Brexit.



Now, UK became very well-exposed to protestations in the street can turn to riots objecting this action which is not only considered against EU, but also against the democracy in UK which drove it previously out of EU which can say it is not fair and does not respect the democracy of UK they respected in June 2016.



From my perspective, it seems impossible now to watch The Brexit Advocate Boris Johnson having EU position shift on The Irish boarder backstops and he surely knows that too and that's why he is looking for a solution more inside of UK than outside of it.



Boris Johnson could not only unite the opposition against EU, but also against the conservative party which has many members against this action which is considered to them unconstitutional conspiracy in this very critical period of time like The Speaker of the House of Commons, John Bercow who pledged to do anything to stop that crushing UK out of EU without a deal.



Boris has already realized that gathering efforts to cap him from crashing UK out of EU without a deal anyway at the end of next October and that's why he planed to tie the MPs for longest possible time but I think that John Bercow will fulfill his word and does his best in the left time to tackle that hard Brexit even if it is to lead to dropping that government.



Boris's action came also as a shock to many MPs who were looking forward for recalling to cut the parliament yearly vacation to look in the Brexit outcome.

While the UK Labor party leader Jeremy Corbyn was still looking forward for new parliament election he believes he can win to pass demand for new referendum on the Brexit itself!



Economically, There can be prices turmoil over the consuming and also the producing level in the coming period of time which can watch very low business confidence levels and very much rumors.

BOE is expected to criticize Boris's efforts which can lead to hard Brexit can threat the financial sector which is now ahead of material economic disruption not just longer stalling and lower confidence in business spending waiting for higher certainty.

While the global economic slowdown is weighing down on the economic activity in UK as many other industrial countries because of the trade war which can lead to much lower Yuan exchange rate.

BOE is expected to send stronger easing signals and it may cut the interest rate even before Oct. 31 to boost confidence and stimulate the demand and avert further economic deterioration in UK, Despite the pressure on the British pound which can fuel the inflation.

As BOE did more than a decade ago by the end of 2008 when the inflation reached 5.2% and there was economic shrinking in the same time lead to 3 ways split inside the MPC ended to considerable easing actions drove the interest rate down from 5% in September 2008 to 0.5% in March 2009 because of the global credit crisis.


GBPUSD Daily Chart:

GBPUSD-Daily-29-08-2019 07-16-12 ص.jpg


After holding above 1.20 psychological level, GBPUSD could extended its rebounding to 1.2308, before coming under emerging downside pressure drove it to 1.2156.

GBPUSD is trying now to stabilize again near 1.22 in its eleventh day of being above its daily Parabolic SAR (step 0.02, maximum 0.2) which is reading today 1.2153.

GBPUSD lower high at 1.2308 came well below its daily SMA50, its daily SMA100 and its daily SMA200 as the previous lower highs at 1.2578 and 1.2785 forming another dovish sign.

GBPUSD daily RSI-14 is now referring to lower existence inside the neutral area reading 47.522.

GBPUSD daily Stochastic Oscillator (5, 3, 3) which is more sensitive to the volatility is still having its main line inside its neutral territory at 59.102 leading to the downside its signal line which is higher inside this same region reading 70.744.

This relatively big discrepancy between the leading main line and the signal line expresses about the higher downside momentum the pair faced recently, after negative crossover inside its overbought territory above 80 on forming 1.2308 lower high last Tuesday.



Important levels: Daily SMA50 @ 1.2361, Daily SMA100 @ 1.2593 and Daily SMA200 @ 1.2765

Experienced S&R:

S1: 1.2156

S2: 1.2015

S3: 1.1986

R1: 1.2308

R2: 1.2578

R3: 1.2785



Kind Regards

Global Market Strategist of FX-Recommends

Walid Salah El Din
 
 
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