Further GBP Price Drop Likely as Brexit Deal Faces Strong Opposition
GBP price, news and analysis:
- The proposed Brexit agreement between UK PM Theresa May and the EU is facing strong political opposition all round in the UK.
- That means the likely next move in the GBPUSD price is lower still as she struggles to win approval for it.
GBP price at risk
GBPUSD is dropping further below 1.30 in Europe Thursday after a highly volatile session Wednesday as traders weighed up the impact of the proposed Brexit deal between UK Prime Minister Theresa May and the EU. Moreover, it could well come under more downward pressure in the days ahead as opposition to the agreement dents confidence in the Pound.
May is due to make a statement on the agreement in Parliament Thursday ahead of a likely EU Summit later this month, perhaps on November 25, but she faces a series of hurdles and a stumble at any one of them could lead to more GBP weakness.
GBPUSD Price Chart, Daily Timeframe (July 1 – November 15, 2018)
In particular, the deal has to be ratified by the UK Parliament and that looks currently to be very difficult to achieve amid hostility from the opposition Labour Party and from Northern Ireland’s Democratic Unionist Party that holds the balance of power in Parliament.
May also faces dissent from both the hardline supporters of Brexit and those wishing to remain in the EU within her own ruling Conservative Party. Despite winning the approval of her cabinet for the potential agreement, the Brexit Secretary Dominic Raab and a junior minister in the government resigned early Thursday and more resignations are possible.
May could also face a no-confidence vote in Parliament as Brexit hardliners gather signatures for a challenge to her authority that could ultimately lead to her downfall.
GBPUSD Price Chart, Five-Minute Timeframe (November 14-15, 2018)
For now, a possible target is 1.27, where the pair traded in late October, and a drop below support there would likely lead to more losses.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.