GBP/USD: Will the bears take control following UK parliament voted PM Johnson's actions were unlawful
GBP/USD has had a resilient recovery from the low of 1.20 at the start of the month and currently trades at 1.2450 as we come to the end of September. We have just got confirmation that UK parliament voted that PM Johnson's actions were unlawful and that he can not suspend parliament. (GBP Positive risk removed off the table).
October 31st is looming ever closer and UK politics is still a mess, the chances of a no-deal Brexit increase every day in my opinion. Last week the EU said they could work together on an alternative to the backstop but that seems to of faded away just as quickly as it comes in.
Where does this mess leave us on the charts? Stalling at the major resistance level at 1.25, forming a head and shoulders pattern on the 1 and 4-hour chart, break of structure and a potential change of trend to come to the downside. The height of the pattern takes us a good 200 pips to the downside and approaching key support levels at 1.2150 and the ultimate low in Cable seen at 1.20.
A break and daily closure above 1.25 / 1.2550 would negate this trade idea, 4-hour chart below.