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Forex Friday – Brexit, we have a Deal!

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Barry Dumas
Forex-Technical-Trade-Note

It has been over three years since the British voted to leave the European Union and they finally managed to secure a deal with the European Union on Thursday.

This comes after years of discussions which came to a climax this week as policymakers managed to clinch a deal that suits both parties.

  • "Where there is a will there is a deal – we have one!" European Commission President Jean-Claude Juncker said in a tweet a few hours before the start of an EU summit in Brussels. - Reuters

But yes, there is a, "But" Prime Minister Boris Johnson is left to persuade his Parliament to get the deal approved.

  • The uncertainty over Parliament's approval means that, two weeks before the latest date for the United Kingdom's departure from the world's largest trading bloc, the possible outcomes still range from an orderly departure to a chaotic exit or even another referendum that could reverse the entire endeavour. – Reuters

Super Saturday

The showdown between Prime Minister Johnson and Parliament will kick off this Saturday which is now abruptly called, "Super Saturday" This is the first time since 1982 that a sitting in Parliament will be held on a Saturday. The Conservatives have no majority, so we can expect a showdown of note as PM Johnson tries his utmost to convince the opposition.

The British pound (GBP) advanced as the news broke which saw Sterling hit a fresh 5-month high but quickly retraced as the dust settled and the news is absorbed.

Taking a closer look at the GBPUSD currency pair: 

The British Pound (GBP) also gave up some of its gains from yesterday's rally with the U.S Dollar (USD) pretty much flat on Friday. If we see the deal accepted by the U.K parliament, then we might expect the GBPUSD currency pair move higher to the 1.3176 target level.

GBPUSD Curncy GT247 Bloomberg-4Source – Bloomberg

Taking a closer look at the FTSE 100: 

The FTSE 100 has picked up slightly from yesterday as the price action is now firmly between the 7259 resistance and 7137 support level. The FTSE might only indicate movement after "Super Saturday" which if a positive outcome is reached might see the FTSE target 7046.

UK100LM GT247 BloombergSource – Bloomberg


Disclaimer:

Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by Barry Dumas, Market Analyst at GT247 (Pty) Ltd t/a GT247.com (“GT247.com”) as general market commentary, and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. GT247.com does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information which we receive from third party data providers. You must rely solely upon your own judgment in all aspects of your trading decisions and all trades are made at your own risk. GT247.com and any of its employees will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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