British Pound Outlook Bearish Amid Renewed No-Deal Brexit Fears
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British Pound, Brexit, EUR/GBP, GBP/USD – TALKING POINTS
- British Pound outlook tilting more bearish as no-deal Brexit risks return
- EUR/GBP bounces back from 3-year support, recovering over 2 percent
- GBP/USD fell by similar magnitude, trading on cusp of critical support
British Pound Outlook
The outlook for the British Pound has become cloudier following the market-friendly UK election where Prime Minister Boris Johnson’s Conservative Party was able to secure a strong majority. However, recent news about his proposal to legally block an extension of the transition period beyond December 31, 2020 has revived no-deal Brexit fears. Sterling has fallen a little over two percent against the Euro and US Dollar.
GBP/USD at Key Support: Selloff Ahead?
After spiking to 19-month highs, GBP/USD has retreated and is now testing the upper layer of the 1.3015-1.2816 congestive-turned-support range. Dropping into this zone could set the pair up for another interim of directionless trading until there is more political clarity. Conversely, if GBP/USD continues to fall, the next major multi-tier floor to look for will be the 1.2769-1.2816 range. A break below that could catalyze an aggressive selloff.
GBP/USD – Daily Chart
GBP/USD chart created using TradingView
EUR/GBP Approaching Critical Resistance Zone
After dipping into a critical three-year support zone, EUR/GBP has bounced backed and shattered several resistance barriers along the way. The pair is now aiming to re-enter a formidable range which saw EUR/GBP trade within its walls from October 16 through November 8. Cracking that ceiling with follow-through could open the door to a bullish spike which may be amplified if Brexit fears pressure the British Pound.
EUR/GBP – Daily Chart
EUR/GBP chart created using TradingView
BRITISH POUND TRADING RESOURCES
--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.