THIS IS NOT A TRADING ADVICE!!!
I expect to see GBPUSD to move south toward 1.2, fundamentally I can list below items to support weakness in GBP.
Brexit uncertainty is the main reason, if Brexit risk eliminated then I believe that GBPUSD will be headed north for a while, but as it seems it will not be possible until autumn.
Second uncertainty is Tory leadership which will come to an end soon. Boris Johnson, ex-mayor of London, the most probable candidate for 10 Downing Street previously resigned from May Government because of softer Brexit terms. He is definitely following a tougher line than May (May was against Brexit before she took the power), but as seen from May's last reaction to Brexit without agreement, it will also be hard for Boris Johnson to get a concensus easily. He may face similar dramas, just like May did. Still we are far away from this stage.
An other alternative for Brexit is with a deal, on this hand we have the Irish back-stop, the EU bill; 39b GBP payment to EU (payment will last in 2060). Anti-Brexit chorus started to sing 90b GBP of no deal Brexit bill, pumping fear to community worked well for the last year, we will see how it will end this year.
Brexit Party with sympathetic but sharp-tongued leader Nigel Farage; Populist parties showed themselves during EU elections by hitting hard center parties but to be honest they did not get exactly what they wanted. However the tread of far right shows us that united Europe may still be at risk, especially Mutter Merkel leave the office. Election success of Brexit Party, is definitely causing a worry for both Labour Party and Tories. I believe this is the reason for lowering tone for calling an election on Labour side. Tories, I am sure they will be the main loosers in an early election.
In short; political situation in UK is divided by deep cracks. Scottish people are trying to leak from these deep cracks and stick on to EU identity while protestan Irish people are trying leak. Until Brexit issue put on the track firmly, GBPUSD is under political risks and headed to south.
I expect to see GBPUSD to move south toward 1.2, fundamentally I can list below items to support weakness in GBP.
Brexit uncertainty is the main reason, if Brexit risk eliminated then I believe that GBPUSD will be headed north for a while, but as it seems it will not be possible until autumn.
Second uncertainty is Tory leadership which will come to an end soon. Boris Johnson, ex-mayor of London, the most probable candidate for 10 Downing Street previously resigned from May Government because of softer Brexit terms. He is definitely following a tougher line than May (May was against Brexit before she took the power), but as seen from May's last reaction to Brexit without agreement, it will also be hard for Boris Johnson to get a concensus easily. He may face similar dramas, just like May did. Still we are far away from this stage.
An other alternative for Brexit is with a deal, on this hand we have the Irish back-stop, the EU bill; 39b GBP payment to EU (payment will last in 2060). Anti-Brexit chorus started to sing 90b GBP of no deal Brexit bill, pumping fear to community worked well for the last year, we will see how it will end this year.
Brexit Party with sympathetic but sharp-tongued leader Nigel Farage; Populist parties showed themselves during EU elections by hitting hard center parties but to be honest they did not get exactly what they wanted. However the tread of far right shows us that united Europe may still be at risk, especially Mutter Merkel leave the office. Election success of Brexit Party, is definitely causing a worry for both Labour Party and Tories. I believe this is the reason for lowering tone for calling an election on Labour side. Tories, I am sure they will be the main loosers in an early election.
In short; political situation in UK is divided by deep cracks. Scottish people are trying to leak from these deep cracks and stick on to EU identity while protestan Irish people are trying leak. Until Brexit issue put on the track firmly, GBPUSD is under political risks and headed to south.
Final target 1.2