Mario Blascak, PhD
Independent Analyst
- The GBP/USD leaped off October 2018 low of below 1.2877 as the Brexit impasse continues.
- Part of the UK Brexit negotiating team thinks that transition under Theresa May will take years and warn of “long-running” multi-year transition.
- The UK Brexit Secretary Dominic Raab said on Thursday that the risk of no deal is real if the EU engages In intransigent approach.
- The GBP/USD is trapped in a downward sloping trend with September low of 1.2790 being the next target price.
The GBP/USD is trading little changed on the upside at around 1.2900 after falling to fresh October low of 1.2877 earlier on Thursday. With lack of fundamental drivers, Brexit still dominates the news in terms of currency related moves.
The UK Brexit Secretary Dominic Raab said on Thursday that the risk of no deal is real if the EU engages In intransigent approach while affirming the press of doing his best to deal with the European partners.
Earlier this week, British media ran reports of the UK Prime Minister Theresa May actually losing control over her own Conservative party lead government as the junior coalition Unionist party infuriated joined the Conservative party hardliners in their opposition to May and Brexit solution omitting the Irish border rule.
The GBP/USD is still moving in a downward sloping trend framed by last week’s high of 1.3238 and Monday’s high of 1.3091. After falling sharply on Monday towards 1.2940, the GBP/USD recovered on Brexit optimism on Tuesday just to fall back to October lows on Wednesday and early Thursday. While moving sidelines, the technical oscillators including Momentum, the Relative Strength Index both turned flat in the neutral territory on a 1-hour chart. The Slow Stochastics made a bullish swing higher in the oversold territory indicating a current sideways trend to prevail. After the GBP/USD fell past price target of 1.2920 the and directional move is strongly on the downside, 1.2790 representing September 2018 low still remains the next target.
GBP/USD 1-hour chart
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