GBPUSD, H1
The Sterling has come under pressure, and is presently showing declines on the day versus both the Dollar and the Euro. The Cable, which is seeing its biggest weekly decline since early August, has printed a fresh seven-week low at 1.2839, which is nearly 60 pips down on the intraday high seen in Asian trade.
Compared to levels that were prevailing a week ago, however, the Sterling is down by an average 0.9% versus the G3 currencies, and is off by 1.9% versus levels seen a month ago, reflecting an increase in the Brexit discount as the clock ticks towards the UK’s exit from the EU, on March 29 – without any real sign of a solution to the Irish border problem. It also looks highly uncertain that whatever deal might be agreed on would be passed in the UK’s House of Commons, which, if so, would prompt a general election or a new referendum (or both).
There is a risk that as the available time for negotiation ahead of Brexit D-day next March diminishes, markets will start to push the Sterling lower as the risk of a no-deal Brexit ratchets higher. The Cable has trend Resistance is at 1.2933-35, while the early-September low at 1.2786 provides a possible downside waypoint.
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Andria Pichidi
Market Analyst
HotForex
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