GBPUSD Price Outlook Fragile as Boris Johnson Heads to Europe
Brexit and GBPUSD Price, Chart and Analysis:
- UK PM Boris Johnson to seek concessions from the EU.
- GBPUSD may slip lower as EU leaders are expected to rebuff UK PM.
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EU/UK Meetings to Shape Brexit Negotiations
UK PM Boris Johnson will meet German Chancellor Angela Merkel on Wednesday and French President Emmanuel Macron on Thursday to repeat that the Irish backstop must be taken off the negotiating table if a deal is to be struck between the two sides before October 31. This task may be beyond the PM as the EU. Via different channels, has repeatedly said that the Withdrawal Agreement will not be changed and that the backstop remains. PM Johnson has said that the UK will leave the EU on October 31 with or without a deal, although his preference is for the former.
While this situation is nothing new, it remains to be seen if the EU offers some flexibility to Johnson or if they rebuff him completely. The UK PM will meet with other EU leaders at the Biarritz G7 summit this weekend and will continue to press his case.
GBPUSD Price Starting to Break Lower
GBPUSD is coming under selling pressure with Brexit hitting the British Pound while the US dollar is trending higher and back at near three-week highs. The pair are slowly heading towards the August 12 multi-month low at 1.2015 which currently guards the mid-January 2017 low print at 1.1983ahead of the October 2016 spike-low at 1.1800. To the upside, recent daily highs between 1.2178 and 1.2250 will curb bullish momentum.
GBP/USD Price Chart (December 2018 – August 19, 2019)
Retail traders are 74.3% net-long GBPUSD according to the latest IG Client Sentiment Data, a bearish contrarian indicator. However recent daily and weekly positional changes give us a stronger bearish contrarian biaseven though traders remain net-long.
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