Latest Brexit Update And What It Means For GBPUSD | Summary and Q&A

TL;DR

The pound sterling is being supported by Brexit optimism, with a potential rally towards the 135 area, but volatility remains high.

Key Insights

• 🤝 Pound sterling is currently supported by Brexit optimism and the market's belief in a deal or reduced chance of no deal.
• ✋ Volatility remains high in the pound to dollar pair, with recent examples of significant movements.
• 🤩 The 135 area is a key resistance level to watch, with options activity and potential for a squeeze on long-term shorts.
• 👾 The analyst is mainly favoring long positions, but also suggests being aware of possible developments that may change the game plan.
• 😥 Entry points for long positions are suggested around the 130 area, with potential retracements to 132 or 131.
• 🥺 A breakout above 133 would indicate a push towards 135, and a potential break of 135 could lead to a rally towards 140.
• 📰 Traders are advised to monitor Brexit news closely as it can significantly impact the pound's direction.

Transcript

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Questions & Answers

Q: What factors are supporting the pound sterling against the dollar?

The pound sterling is being supported by Brexit optimism, as all roads seem to be leading towards a deal or reduced chance of no deal. This has led to a strong run and the market buying dips.

Q: What level is the pound expected to rally towards?

According to the analysis, the pound is expected to rally towards the 135 area, which is a significant historical resistance level and has a lot of options activity associated with it.

Q: What is the suggested entry point for long positions?

The analyst suggests looking for opportunities to enter long positions around the 130 area. This is a psychological level and is expected to attract a bulk of buyers.

Q: How should traders manage their positions in light of Brexit news?

Traders should watch out for volatility and keep their stops tight. The analyst recommends playing the pound on the long side but being open to short-term opportunities and resistance areas.

Summary & Key Takeaways

• Pound sterling has had a strong run, supported by optimism regarding Brexit deal or reduced chance of no deal.

• Volatility in the pound to dollar pair is still prevalent, with dips being bought and market ready for compromise.

• Next week is crucial for the pair, with meaningful votes, a potential vote on no deal, and a vote on extending Brexit deadline.