"Do or Die" - Boris Johnson's commentary on leaving the EU by October 31 was printed in several British newspapers. The lead candidate for prime minister may have diverted attention from his private life after his neighbors called the police for a scandal between him and his girlfriend. However, this did not change his view that the UK would leave the EU even without a deal, which negatively affects the pound.
Investments in the United Kingdom have fallen due to these fears. Mark Carney, managing director of Bank of England, warned that uncertainty is damaging to short-term economic performance, and BOE may lower interest rates in the case of Brexit without a deal.
What does the GBP/USD chart show?
The price of the currency is moving in an expanding trend channel, as yesterday managed to reach its resistance and a 38.2% level on Fibonacci from where southbound. It is currently at 23.6% at Fibonacci, which has short-term support. As the downward movement is strong and Boris Johnson's comments do not stop, we're more likely to see a breakthrough at that level from where we can position ourselves with "sell" deals.
Alternatively, if the price stays above this level, we may see again a proven resistance test at 38.2% on Fibonacci. At a breakthrough at this level, the downward movement may be considered to have ended and a new ascending trend should be considered. In such a scenario, we can position ourselves with "buy" deals.
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