GBP Jumps After Tories-DUP Deal - Forex News by Strategia Forex

GBP Jumps After Tories-DUP Deal

Posted Monday, June 26, 2017 by
Skerdian Meta • 2 min read

The UK Conservative party (Tories) and the Democratic Unionist party (DUP) finally signed the agreement to govern Britain “together”.  

If you remember, the Tories had a majority in parliament before the elections, but Theresa May, in arrogance, decided to have a snap election.

She must have thought that the Conservatives deserved more power. But her arrogance regarding Brexit and the path that the UK took after the Brexit referendum have worn out support for May among Brits.

May used to be a “remainer” before the Brexit referendum, but she turned 180 degrees and took a very hard line on Brexit. It feels like UKIP´s Nigel Farrage was her mentor the entire time.

Well, she took the chance and lost the majority in parliament. Now the Tories have to beg the DUP to join their government and remain in the matrimonial bed, which will be tough in my opinion.

DUP will be requiring all sorts of handouts for Northern Ireland and they already got an extra 1 billion Pounds.

But the biggest hurdle is the border between Northern Ireland and the Republic of Ireland. Rep. Of Ireland is an EU member and DUP wants to keep an “open” border between the north and the south. On the other hand, May wants a hard Brexit. You figure it out.

GBP jumped about 30 pips higher after the announcement, but this looks like a very gain. On the other hand, the EU is playing its hand. Juncker´s advisor literally said that the EU is sort of getting tired of the UK and that the “US is not yet used to the idea of compromise”.

That´s the general feeling about the UK in Europe and I don´t see how May can get from the EU what she has promised to the British public – basically rip all the benefits and give nothing back.

The 200 SMA (purple) has been providing solid resistance

GBP jumped higher after the agreement, but the market knows that there´s no where for the GBP to go.

So, I´m planning on opening a sell forex signal in GBP/USD, probably around 1.2750 which is where the 200 SMA is providing resistance.      

 

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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