Brexit Latest: President Trump's Trade Warning Damages Sterling
Sterling, Brexit and President Trump:
- UK PM May seemingly oblivious to criticism of her Brexit proposal.
- US President Trump pouring cold water on future US-UK trade plan.
We have just released our Brand New Q4 Trading Forecasts including USD and GBP.
Sterling (GBP) Left Adrift as Brexit Turmoil Continues
The recent comments from US President Donald Trump that the UK’s current Brexit proposal would be hamper a US-UK future trade agreement has knocked Sterling lower, increasing the pressure on UK PM May as she tries to sell her vision of a Brexit deal. According to Trump, the UK’s proposal ‘sounds like a great deal for the EU’ and with the deal as it stands, ‘they (UK) may not be able to trade with us’. This intervention will heap further pressure on PM May who is currently struggling to get momentum behind her proposal, and as it stands it is very unlikely that the government will get its deal through the House of Commons at the December 11 vote. There are currently 89 members of her government who are likely to vote against the deal, while the DUP, who have 10 votes, have also said that they will not vote for the deal.
Against this backdrop, Sterling continues to slide lower and is now nearing the August low at 1.2660, the lowest print in 17-months. Below here, horizontal support at 1.2589 guards the 23.6% Fibonacci retracement of the June-October 2016 sell-off at 1.2590.
GBPUSD Weekly Price Chart (February 2016 – November 27, 2018)
IG Client Retail Sentiment shows that traders are 74.4% net-long GBPUSD, a bearish contrarian signal. In addition, recent daily and weekly positional changes give suggest a stronger bearish GBPUSD trading bias.
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