11/12/2018 - Take care of what's next on Brexit, before selling Sterling further

Walid Salah Eldin

Active member
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11th December 2018 - Take care of what's next on Brexit, before selling Sterling further


GBPUSD Hourly Chart:



After failing to rebound higher above 1.26, the cable resumed its slide toward 1.25 psychological level getting below yesterday low at 1.2506 in another dovish sign.


The pair is still well exposed to further lower level, as UK PM Teresa May cannot be rewarded by a new rescue plan for Brexit in Brussels without new costs can be harder to be approved by UK house of common which has shown strong refusal of the current plan specially on the Irish Borders issue.



While the only way to solve the Irish boarders problem which is the key issue of the common house refusal is looking to have Irish acceptance to leave EU too and that is nearly impossible.



In the same time, the chance of re-Brexit referendum voting is rising up, As May's failure can pave the way for new referendum on Brexit can lead easily to maintaining of UK existence in EU and that is very favorable to Brussels.


So, EU summit next Thursday is not expected to give May any support, but what she has already gained of terms on Brexit by God's will.


The European Court of Justice preceded May's Decision to delay voting on her Brexit plan which was supposed to be done today by ruling that UK can unilaterally revoke Article 50, reversing Brexit and this resolution timing shows strong EU will to have UK in EU.


While the Northern Irish unionist DUP party "which kept May in power in the recent called parliament elections" objects any Brexit deal can give a special status to the region, different from the rest of the UK.



BOE policymakers warned from their side more than once about the outcome of no Brexit deal before the house of common.


It indicated that not all of the banking sector is ready for no deal can lead to 8% fall in GDP in short-term, unemployment rising to 7.5%, inflation reaching 6.5% year on year, house prices slide by 30% and Sterling 25% weaker.



The markets have not given yet pricing on new referendum, as long as May who refuses that will is still in power.


But whenever we see her cabinet falling, there will be starting for pricing on that referendum which can send Sterling higher and raise FTSEE 100 on rising of the business confidence and growth outlook in UK which can be enough to send May out of the political sense.


Take Care of what's next on Brexit, before selling Sterling further


Have a good day


Kind Regards

Global Market Strategist of FX-Recommends

Walid Salah El Din