GBP Tightens Amid Brexit Negotiations
Shain Vernier • 1 min read
As it has for the past two-and-a-half years, Brexit uncertainty is dictating trade of the British pound sterling. The latest installment features ongoing negotiations between U.K. PM Theresa May and E.U. Commission President Jean-Paul Juncker. Reports from the meeting are on the negative side as Juncker publicly stated that he was “not very optimistic” when it comes to the issue of reaching a deal.
Even though May and Juncker have established some common ground, not too many believe that British Parliament will reach a consensus on much of anything. In truth, Brexit is a complex geopolitical situation without precedent. Achieving a resolution deemed acceptable by all parties involved has proved to be a herculean task.
Brexit Has Traders NonCommittal Toward The Pound
Daily ranges have tightened considerably for the GBP as the May/Juncker talks have evolved. Earlier this week, a short trade recommendation for the March British pound FX proved to be a success. Now, this market is bogged down in a neutral technical position.
Here are two levels to keep an eye on as the session progresses:
- Resistance(1): Daily SMA, 1.3073
- Support(1): Bollinger MP, 1.2974
Overview: It is an elementary point, but Brexit is running the show for the GBP. As the March 29 deadline and exit day approach, this phenomenon will become even more evident.
Given the weekly news cycle, it is little surprise that forex players are taking their time in addressing the GBP. If we see any fresh headlines regarding a Brexit deal, then a directional move is possible by Friday’s closing bell.