FX_IDC:GBPUSD   British Pound / U.S. Dollar
With the two government resignations today there is a realistic probability that the UK government is going to implode over the summer. Mrs May has worked hard to keep things together but it is looking almost impossible to keep going without the Brexiteers on board. Her party does not support the soft (non-brexit) that she is proposing and it is quite likely they will undermine her authority and launch a leadership contest. If that happens it will be impossible for the UK to negotiate a Brexit deal in time, crashing out without a deal will cause a significant hit to the UK economy and the forward-looking FX markets are likely to punish the GBP as a result.

Technically I have moved to my alternative bearish count which suggests we have a possible downside target of 1.20, some 1200 pips below where we are now. I have sold GBPUSD at 1.3261 risking 2% of equity, i will review the target as the trade develops.
Trade active: moving stop to break even. Price is struggling to make any real progress so decided to take a conservative approach and conserve capital
Trade active: GBPUSD has made a new low, trade is now up 250 pips and is approaching target. It would not be unreasonable to close now or perhaps take partial profit. I will hold for the time being, there is a strong possibility that weak inflation data will reduce the chance of a Bank of England rate hike next month as it comes on the back of lower than expected wages data. The Brexit situation appears to be getting worse as the chances of a disorderly no deal exit appear to be growing. The downside seems the most likely direction at the moment but it is very volatile
Trade closed manually: closing trade for +500 pips

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