The GBPUSD pair has dropped around 5% since September, but it looks like that streak has come to an end as this week it’s been up each day.
On Wednesday, it was testing the 1.30 level to the upside, and if this resistance is not held, the medium-term uptrend could be renewed. Earlier on Monday, Boris Johnson’s “Intermarket bill” was passed in the House of Commons. This bill outlines a new “safety net” of rules for trade between England, Scotland, Wales, and Northern Ireland to prevent disruption to the internal market inside the UK, even in the event that Britain and the EU do not reach a comprehensive trade agreement by the end of 2025.
To put it in laymen’s terms – it looks like we will see a much more complicated and messier Brexit than previously agreed on.
Moreover, some of the EU countries had already threatened to walk away from the negotiations, and Brussels has also threatened legal action against London, should the bill move forward. Nevertheless, investors have already priced in this news – as the GBPUSD pair fell 600 pips – but now the focus is once again on the Fed and its ultra-loose monetary policy.
Since the Fed is much more aggressive in money printing than the Bank of England, the long-term trend in the GBPUSD pair still looks bullish, and dips, such as this one, are expected to be bought. If the 1.30 level is broken to the upside, the next target for bulls could be near 1.3150 and afterward at around 1.33. The current cycle high near 1.35 will be the main resistance in the next weeks.
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Peter Bukov | Market Analyst
Peter comes from a background in corporate finance which began in 2013 when he completed the Corporate Finance Program at the University of Economics in Bratislava. He’s been actively involved in the market sector since 2008 and got his hands-on experience in trading in 2011.
His experience in finance and trading continues not only as a market analyst at Axiory Intelligence but also through his studies to obtain a degree in Capital Markets. The study is in line with MIFID II regulations and is under the supervision of the European Regulator ESMA, which strongly emphasizes ethics and morale in investing and working with a client.
In addition, Peter was awarded the title of ASCI from the CISI Educational Institute of England where he is an associate member and the Bloomberg Aptitude Test results ranked him among the top 4% worldwide two years in a row.
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