Thread: Instaforex Analysis
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06-12-18, 05:31 #11
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GBP/USD. Supporters of "soft" Brexit have an unexpected ally
The British currency was under strong pressure yesterday, following the controversial fundamental background. The unexpected cohesion of the British deputies against Theresa May has caused alarm to traders, after all, after only 6 days, parliamentarians must decide the fate of the Brexit deal. On the horizon, the prospects for Britain's chaotic exit from the EU again loomed, after which the pound fell to 18-month lows.
On the other hand, Leadsom's statement supported the British currency: the fact that the position of the parliamentary leader puts the deputies before a simple but difficult choice: either they vote for a "bad deal", or they support a "hard" Brexit. No "plan Bs", re-referendum or other half-hearted scenarios. Only forward or backward, only "black or white", without any shades. It should be noted that Theresa May is now playing this card: in almost every speech she paints a catastrophic chaotic Brexit, warning deputies that they take responsibility for the implementation of such a scenario. That is why Labour has been actively promoting the idea of a second referendum or an alternative agreement with Brussels to convince Parliament that their choice is not limited to "hard" or "soft" Brexit.
That is why today's statement by Andrea Leadsom is so important in fact, she sided with Theresa May at least voiced the message, which is politically beneficial to the prime minister. And here it is worth noting that Leadsom has a strong enough influence among conservatives. She was one of the contenders for the premiere position after David Cameron left the post. Moreover, in 2016, she even went to the last round of elections of the leader of the Conservative Party, but lost to the current prime minister 199 deputies of the Conservative Party voted for May's candidacy, 84 for Leadsom. Later, she withdrew her candidacy, thereby opening the way for Theresa May to the prime minister's office.
Unfortunately, now we can only analyze the causes of this or that surge in volatility after the fact, while it is almost impossible to predict price fluctuations for the GBP/USD pair (as well as for other cross-pairs involving the pound).
From a technical point of view, only support levels are relevant. In this case, the strongest support level is 1.2640 - the bottom line of the Bollinger Bands on the daily chart. Slightly higher is the price low of the year - 1.2660, which also acts as support - for example, yesterday, with a pulsed southern movement, the pair did not refresh this low, stopping at 1.2670. But here it is worth warning that with strong volatility, the above levels of support will not be able to resist the onslaught of bears, especially in anticipation of a key vote in the British parliament.
Analysis are provided by InstaForex
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