Poor ‘cable’ doesn’t know which way to go. GBP USD Analysis
What happened to the British Pound today? Some say the news were first seen on twitter, no surprise there as investors are probably getting used to the daily abnormality that drives the financial market lately. The new Prime Minister of the United Kingdom has taken another step in the direction of Brexit, with or without a deal. In his move, the government has asked the Queen of England to suspend Parliament that was expected to resume sitting on September the 3rd after their summer break. This announcement came a day after 160 Members of Parliament came together to sign a declaration to stop a no-deal Brexit using ‘whatever mechanism possible’, dabbing it the ‘Church House Declaration’.
Many see this move by Johnson as a way to restrict the parliaments time in order to come up with ideas on how to legally stop a no-deal Brexit, in case Johnson is not able to seal a new deal by the fast approaching deadline of October 31st. This action may also increase the chances for a ‘vote of no confidence’.
What does this mean for GBP USD? Last week PM Johnson visited Chancellor Merkel in German on Wednesday and President Macron of France on Thursday and Johnsons robust optimism and sweet words increased confidence that a deal may indeed be reached and the pair started to rise, creating a new highest high for August at 1.23096 before spiking down today on these new developments.
The thing is that a no-deal Brexit is going to be hard on both sides, the EU and UK and many people oppose the idea of a no-deal Brexit. Last week investors got a sliver of hope that Johnson is sincerely considering the possibility of a new deal before October 31st and his move today, not only does it take that sliver of confidence away but it is also done in a way that hinders actions from opposition.
Commons speaker John Bercow says the move is ‘a constitutional outrage’.
Technically on the 4HTF, we see that the rally fell short of the 61.8% Fibo, the price is currently travelling near 38.2% Fibo in the vicinity of 1.22. The spike down is respectful of the strong area of support, with which we were able to form a new local trend line. Parabolic SAR and MACD both point towards short positions. Ideally, I would like to see the EMAs intersect and price break the local trend line and support at 1.21569 to the downside with target areas at 23.6 Fibo 1.21337, followed by 1.20148, the lowest low of 2019. Please be mindful of the local areas of support and resistance and we recommend keeping track of news coming from the United Kingdom on Brexit updates.
Aside from Brexit, tomorrow the United States will publish their GDP at 12:30GMT.
Many see this move by Johnson as a way to restrict the parliaments time in order to come up with ideas on how to legally stop a no-deal Brexit, in case Johnson is not able to seal a new deal by the fast approaching deadline of October 31st. This action may also increase the chances for a ‘vote of no confidence’.
What does this mean for GBP USD? Last week PM Johnson visited Chancellor Merkel in German on Wednesday and President Macron of France on Thursday and Johnsons robust optimism and sweet words increased confidence that a deal may indeed be reached and the pair started to rise, creating a new highest high for August at 1.23096 before spiking down today on these new developments.
The thing is that a no-deal Brexit is going to be hard on both sides, the EU and UK and many people oppose the idea of a no-deal Brexit. Last week investors got a sliver of hope that Johnson is sincerely considering the possibility of a new deal before October 31st and his move today, not only does it take that sliver of confidence away but it is also done in a way that hinders actions from opposition.
Commons speaker John Bercow says the move is ‘a constitutional outrage’.
Technically on the 4HTF, we see that the rally fell short of the 61.8% Fibo, the price is currently travelling near 38.2% Fibo in the vicinity of 1.22. The spike down is respectful of the strong area of support, with which we were able to form a new local trend line. Parabolic SAR and MACD both point towards short positions. Ideally, I would like to see the EMAs intersect and price break the local trend line and support at 1.21569 to the downside with target areas at 23.6 Fibo 1.21337, followed by 1.20148, the lowest low of 2019. Please be mindful of the local areas of support and resistance and we recommend keeping track of news coming from the United Kingdom on Brexit updates.
Aside from Brexit, tomorrow the United States will publish their GDP at 12:30GMT.