Sterling and Brexit:
- Expect increased Brexit commentary.
- UK GDP on Friday may underscore recent economic weakness.
We have just released our Q1 2019 Trading Forecasts for GBP.
IG Client Sentimentshows how retail traders are positioned in a wide range of currencies and assets including Sterling. The data also shows daily and weekly positional shifts which can help you make more informed trading decisions.
Sterling Stuck in a Range for Now
The British Pound continues to tread water either side of 1.2750 ahead of the Brexit vote in the UK Parliament next week. PM May continues to push forward her deeply unpopular bill and is hoping that the EU offers her a concession on the Irish border problem to help her ease the plan through. It may well be that an ‘informal agreement’ on the Irish border has already been agreed, with PM May hoping that the move by the EU will then bring reluctant Remain MPs back onside. This week - and the weekend - will be key in the Brexit negotiations and Sterling is at risk of further sharp moves.
The UK data calendar is reasonably bare with only the latest look at monthly UK GDP on Friday of note. The UK economy has started to turn down in the last couple of months and growth is seen as very limited.
While Sterling remains under a cloud for now, traders may want to look ahead at potential Sterling upside if Brexit, in some shape, is agreed. GBPUSD should offer Sterling bulls an opportunity, while GBPNZD and EURGBP may also see positive Sterling action.
GBPUSD Daily Price Chart (June 2018 – January 7, 2019)
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