Brexit issues sparkles leadership challenge fear

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Brexit issues sparkles leadership challenge fear
  • GBP plunging, as Brexit Minister Raab stepped down
  • USD mounting slowly, gaining support from the FED reserve balance sheet
  • Crude oil remains in a yearly low position, market worries begin to surge

GBP Market development

The recent Brexit Turmoil has taken an abrupt U-turn, as Brexit minister Raab, stepped down. Since then, several ministers of May government have handed their resignation letter over, fuelling up the worries of a leadership challenge.

Brexit turmoil has observed today another worst-case scenario from British Pound, as it again lost over 200 points a day, currently residing at 1.2770. Apart from the GBP nosedive, the FTSE 100 erased its morning gains and looking downward to test the key 7,000 level.

GBP/USD daily chartGBP/USD daily chart

USD market trends

US Dollar had been traded slightly higher in the Asia Pacific session, gaining support from the Federal reserve’s balance sheet. Crucially, it has boosted USD and the USD risk threat has been faded away. On the flip side, the USD retail sales has remained mixed, as USD is now trading around 96.70.

Euro and Crude oil outlook

Despite severe malicious malpresentation of Italian budget drama, Euro continues to trade around a tight range between 1.1260- 1.1330 and literally, it is going nowhere, as an upside move is pretty unlikely to happen in near future.

Crude oil remains in a yearly low at 57.10 and a bullish momentum might have bene upcoming, as OPEC are suggesting a 1.4mbpd cut. Yet, Russia has disagreed to join OPEC’s decision of reducing production.

Bottom Line

While this report is being written, GBP/USD has been traded around 1.2770 and GBP has fallen against almost all of the major currencies sharply, amidst meticulous and uncontrolled political drama. Therefore, UK parliament might observe a no-confidence vote in the near future, as multiple ministers had handed over their resignation letters followed by a walking out of Brexit Minister, Raab. GBP/USD pair is facing an imminent danger, where an October low (1.2660 region) could have been on the card in the upcoming week.

Read more in GBP technical outlook here

[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]

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