Sterling still at risk, as sell-offs remain large
- Sterling short-term outlook remains negative, as further cabinet resignations are expected
- UK PM May likely to retain her power, yet back to back resignations from the cabinets put PM positioning in Jeopardy
- DUP told that they would not be supporting the draft Brexit agreement, enhancing the fear that the bill would not pass through the parliament
UK PM Theresa May might have been retaining her power after all, yet there were reports of further resignations from the cabinet. The environment minister, Michael Gove had been told to step up with the post of Brexit secretary, however, he not only did reject the proposal, but also resigned from the cabinet. Additionally, the secretary of state for the international development, Penny Mordaunt might have been resigning. Amidst this political turn over, the DUP told that they would not be supporting the draft agreement, escalating the risk that the Brexit bill might not make it through the parliament.Sterling short-term outlook remains negative
GBP/USD daily price chart
EUR/USD daily price chart
Sterling still remains weaker against a softening USD; however, EUR has gained bullish momentum and currently is reigning over 1.1400 region. GBP/USD is also experiencing a short-term bounce trading around 1.2878, yet it is unlikely to last long. A head and shoulder pattern is formulating from the late October and GBP might have been testing the August 15 low (1.2662) in near future.
GBP/USD IG reports indicated that the retail traders are 68.8% net long and weekly changes are moving GBP towards a bearish bias. Additionally, it is very unlikely that Euro would be sustaining its current bullish movement and downside might open in the next week. GBP volatility should be considered during trading, as dwindling Brexit options are putting GBP price in a perilous positing.
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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.]