+357 25 030 930
Brexit doubts pressure pound
Published on 01.12.2017 16:31

The British pound has enjoyed a good run against its US counterpart ever since rumors spread that the EU and the UK were close to reaching a deal on Brexit terms with some saying that a deal has already been reached on a settlement for the UK to leave the EU as well as favorable conditions for both parties to secure the Irish border.

Those rumors started to unravel today putting the pound under pressure as it is now as investors started to doubt that the border issue would be easily solved and added to that is the question of freedom of movement of UK and EU citizens which has hardly been mentioned and a solution looks increasingly unlikely before the deadline of December 15th

“This week’s sterling bounce on reports that the UK has accepted a higher financial divorce settlement with the EU seems based on the false assumption that the way is now clear for the European Council on 14-15 December to authorize moving on to the next phase of the Brexit process,” said Christopher Granville, managing director at investment research firm TS Lombard.

From a technical point of view we can see a few worrying signs emerging as the pound breaks through $1.35 with the formation of a double top which may also be a catalyst to push the pound lower firstly down to the $1.3370 formal support level and then even lower depending on how negotiations turn out.

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Andrew Masters

Analyst

The world of trading has no boundaries
×

Risk warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, your level of experience and preparation of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.