GBP Higher as Brexit Rules

UK Prime Minister Boris Johnson and Ireland Taoiseach Leo Varadar met today.

The Great British Pound is higher against most G-10 currencies after UK Prime Minister Boris Johnson and Ireland Taoiseach Leo Varadar met today.  The 2 leaders declared they had a positive meeting and that a deal for an orderly Brexit can be done by the end of the month! Although GDP, Industrial Production, and manufacturing data out of the UK were worse than expected, Brexit continues to rule the markets. 

GBP/USD closed up nearly 250 pips on the day, or 2.0%.  The pair halted its ascent at the September 20th lows and horizontal resistance and the lows at 1.2460.  The 38.2% Fibonacci retracement level from the March 13th high to the September 3rd low sits just above at 1.2500.  However, be aware that if a Brexit deal looks more and more likely to get done, GBP/USD could be at 1.3400 in an instant.  


On a 240-minute chart, support is down at 1.2413.  Next support is at 1.2335, which is a 50% retracement of today’s move.  Don’t read too much into the RSI on the 240 minutes chart, as they tend not to be as reliable during fast markets.


After bouncing around for a few months between the 38.2% Fibonacci retracement level and the 61.8% Fibonacci retracement level from the May 6th lows to the August 12th highs, EUR/GBP ran right into horizontal resistance at .9018 and fell off dramatically from there.  Price is back the bottom of the range, closing down 1.7% on the day. First support is the September 20th lows near .8786.  Below that, horizontal support comes in at .8982.


GBP/CAD also traded higher, up 1.8%, near 1.6563.  This is just below horizontal resistance and the 38.2% Fibonacci retracement level from the May 3rd high to the August 8th low at 1.6579.   There is actually a large resistance zone between the 38.2% and 50% Fibonacci retracement levels, as there are a number of prior lows in that area, which now act as resistance.    First support comes in at 1.6403, which is 50% of today’s trading range.   Below that, horizontal and trendline support come in near 1.6336.


GBP/AUD and GBP/NZD also closed up nearly 1.5% for the day.  Note that these 2 currency pairs will not only be greatly affected by Brexit, but also by US-China trade talks.    The Australian dollar and the New Zealand dollar are greatly affected by China.  These pairs could remain volatile over the next few weeks!

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account