GBP outlook optimistic as no-deal Brexit concern fades

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Pound sterling & Brexit trending points

  • Although the British Pound had dropped into 1.30 territory yesterday (Jan. 29th), ahead of Brexit amendment vote, it has regained control on Wednesday, Jan. the 30th, resurfaced over 1.31, as the UK parliament voted to send PM May back to Brussels in order to renegotiate a better Brexit deal.
  • Despite the European Union would unlikely to loss upper hand on the deal, the sterling might stall suffering for now and pave the way for gains for the rest of week, as Eurozone CPI and GDP data are in focus, which would not likely to cheer the market.

Sterling reaches out to 1.31 against American Dollar, price stabilizes so far as US dollar would likely to falter ahead of FOMC minute

GBP/USD pair had been stabilized over 1.3100 region on GMT. 13.00, Jan. 30th, Wednesday, as Tuesday’s Brexit Amendment vote in British House of Commons had proffered a breathing space to UK PM Theresa May, sending her again in Brussels to renegotiate the “backstop”, targeted to prevail a hard-border between the Norther Ireland, which is a part of the independent Irish Republic and United Kingdom as well.Apart from that, the UK lawmakers had also voted yesterday (Jan 29th) to rule out a no-deal Brexit, despite EU’s adamantine approach of not to altering the divorce deal at the eleventh hour, while an EU election is scheduled to be held on May.

Since the UK PM Theresa May had been provided another chance to get a better deal out of EU commission, despite EU’s repeated comment that this current deal had been the best the United Kingdom could get, the Great Britain Pound would likely to extend gains and may breach again above 1.3208, its October, 2018 high, in a short notice.

GBP/USD daily price chart

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GBP/USD daily price chart

 

Bottom Line

Despite EU’s derisive reaction to British attempt to reach out a better Brexit deal, given the PM May’s history of reaching an agreement at the extra times, there is optimism surrounding the next round of talk between the UK PM May and the EU commission.

Meanwhile a decisive approach of the opposition, Labor party leader, Jeremy Corbyn to meet the UK PM May are being observed as a positive debarkation and a fathomable development, which could potentially uplift the Pound Sterling back to the September, 2018 high, at 1.3299, while the initial resistance level remains at 1.3175, on a 90-day moving average.

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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.]

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