Brexit chaos still keeps GBP vulnerable to whiplashing, as PM Theresa May heads for Brussels
- Salubrious Sterling may get stable, as PM May eschewed no-confidence vote
- Sterling worries remain, as PM May heads towards Brussels
- GBP volatility is likely to persist, as Brexit negotiation continues
Later on Wednesday, UK PM Theresa May would be heading for Brussels to meet the European Commission head Jean-Claude Juncker for signing a political declaration regarding the future of EU-UK relationship, ahead of an urgent EU summit due in November 25th. At this standpoint, PM May and Junker are likely to make progress on the signing off the document, yet the deal is unlikely to pass through the House of Commons, again exploding the risks of a no-deal Brexit. Whatever, it is the case, a Brexit volatility would grasp the market. In fact, GBP has been traded in a tighter range close to 1.2800 and it is on a side-way swinging momentum, reigning just over 1.2810. U.S. Dollar softening has been faded away, as an important FED official John Williams told yesterday that they would likely to sustain its previous course regarding the interest rate and it means, the 0.25% rate hike is highly likely to whip up the December USD, while a 0.50% rate hike is not out of the picture yet.
GBP/USD daily price chart
However, this week, US would be on holiday for most of Thursday and Friday, and a GBP rise alongside USD softening is anticipated.
GBP/USD key support remains at 1.2695 and 1.2725 (at August 15thmulti-month low). On the flipside, key resistance is residing at 1.2945 and 1.2995. A break above the key resistance would open up the opportune moment to secure a splashing move above 1.3067. As PM May is likely to sign off the agreement with Junker and Thursday alongside Friday would be holiday in US, GBP upside is likely.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]