EURGBP: GBP Under Attack Following No-Deal Brexit Fears
The British Pound is under pressure this morning as market participants appear to be hedging against a no-deal Brexit, which is now said to be the default position of the new government led by Boris Johnson.
Against the US Dollar, the British Pound slid to a new to a new yearly low, while vs. the Euro the British pound has fared better (EURGBP). The EURGBP pair remains capped by the July high of 0.9053, followed by the 2019 high of 0.9116, which also happens to be the 2018 high. It is on a break to the 2019 high that we could see significant declines in the British Pound, as the price has been range bound between 0.8473 and the 2019 high of 0.9116 since October 2017. The price might continue to trade sideways until the 2019 high goes.
If the EURGBP pair manages to trade beyond the 2019 high, the next resistance level and likewise take profit level of speculators is the 2017 high at 0.9306, followed by the 0.9582 level. The latter level is derived if we treat the 0.8626 to 0.9116 interval a rectangle pattern, and add the difference between the two levels of 490 pips to the 2019 high.
For the pressure to ease on the British Pound the price would need to side below the July 25 low. If this where to happen the price might seek itself towards the lower end of the multi-month range at 8626.Don’t miss a beat! Follow us on Twitter.