GBPUSD, H4
The latest Brexit development has underpinned the pound, amid reports that the British government’s cabinet powwow yesterday yielded a compromise among ministers — deemed to be an “outbreak of unity” by one minister cited by the BBC. This has apparently produced a blue print for Britain’s opening pitch to the EU with regard to a post-Brexit trading relationship. The proposal is reportedly for a “pragmatic Brexit” — for a so-called “Canada plus plus plus” deal, which aims to establish a free trade deal similar to the one Canada achieved with the EU, but with better access to the EU’s single market through close regulatory alignment. The concerns of hard Brexiteers, such as Boris Johnson, about regulatory alignment have apparently been mollified by a proviso to purse “managed divergence”, whereby the UK won’t be necessarily be tied to follow EU rules rigidly. The prime minister will reportedly present the pitch publicly next week (Wednesday). With the European Parliament reportedly putting together a detail proposal calling for the EU to negotiate an “association agreement” giving Britain “privileged” access to the single market, the genesis of a UK-EU deal appears to be taking form. A “Canada plus plus plus” deal. I remain to be convinced that Johnson and the other members of the wider Tory party will be able to hold the party line much beyond the key March horizon.
Cable lifted to a two-day high of 1.3990, extending the recovery from the 1.3856 low that was posted yesterday. The pound has also gained on the euro and yen, foraying into two-week high territory in the case against the former. Expectations are now as high as 84% for a Bank Of England rate hike at their May meeting. Technically, the H4 candle at 12;00 triggered a long position at 1.3968 (C) following the Crossing EMA’s & Bollinger band mid line cross (A & B). Target (E) is provided by the 14 period ATR (D) and takes it to 1.4004 with a stop loss (F) below the latest turn at 1.3919.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
[ujicountdown id=”Next Webinar” expire=”2018/02/27 11:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
