The downtrend continues and there is every reason to believe that nothing will change with pound falling in the foreseeable future. Investors continue to take into account all the risks associated with a tough scenario regarding Britain's exit from the EU. After the election of Prime Minister Boris Johnson and the end of the political crisis, the pound strengthened slightly, because investors expected at least the resumption of negotiations on the signing of a deal regarding Brexit, but this did not happen. Three months before the Brexit deadline, none of the parties is going to make concessions. It seems that with the election of Boris Johnson, Britain has already made its choice and plans to leave the EU at October 31 without a deal.
This week is key for this currency pair, taking into account the publication of a number of macroeconomic reports and meetings of the central banks of the UK and Japan. The meeting of the Bank of Japan has already taken place. The regulator lowered forecasts for inflation growth and left the rate unchanged, expressing its readiness to do it in the future. Most likely, the Bank of England will take a similar, expectant position, although the continuation of the economic downturn in the EU and in Britain itself should not be in doubt. Perhaps the central bank still hopes for the possibility of a deal between the EU and Britain: theoretically, three months would be enough for all the necessary negotiations.
At the moment, we can't see any perspectives for the pound: there are too many negative factors both in the UK and outside. We suppose that the rates will reach a 3-year low in the near future, but may continue falling after that. Therefore, the deals on the trend can be considered as the most effective without a doubt, both in the short and long term. Most technical analysis tools also tend towards short deals.
