Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
GBP dropped on Brexit impasse
2020-12-07 • Updated
What happened?
The European Union and the United Kingdom haven’t been able to reach the Brexit deal so far. The EU Chief Negotiator Michel Barnier publicly refused that both sides are getting closer to any progress. The main sticking points are access to UK fishing waters and the level playing field (a set of rules that stop businesses of one country from having competitive advantages in other countries).
According to Sun, Prime Minister Boris Johnson is ready to abandon EU-UK negotiations. If it really happens, the UK economy will collapse in the short term: GDP is expected to fall by 2%. In addition, taxes on exports to the EU will rise enormously: for automakers by 7%, while for farmers – by 35.4%. Obviously, it will be better for both sides, if they can reach a compromise.
Market reaction
The prospect of the no-deal Brexit pushed the pound down. Just look at the huge swing down of GBP/USD on the chart below!
Technical tips
GBP/USD dropped below the key support of 1.3300. After the breakout, it retraced back to this level, but it’s likely to bounce off 1.3300 and continue falling further. The move below 1.3200 will drive the pair down to the low of November 12 at 1.3120. In the opposite scenario, if it jumps above the resistance of 1.3300, the way up to the recent highs of 1.3400 will be open. Follow news about Brexit further not to miss important developments that will impact the pound!
Similar
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
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Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
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