Brexit's Effect On GBPUSD, EURGBP, And The FTSE 100

TL;DR

The value of the pound against the US dollar is expected to rise, reaching around $1.36-$1.37 per pound. The pound is also strengthening against the euro. However, the FTSE 100 index is showing signs of a bearish trend.

Transcript

hello my name is Nicole Elliot and I'm a technical analyst and private investor and I thought today with all the hoo-ha about brexit yet again I'd look at sort of sterling things British things and see how they're doing and so my first chart is the value of the pound against the US dollar and yesterday we went up as high as one point three three fi... Read More

Key Insights

• 💷 The pound is expected to strengthen against the US dollar, reaching $1.36-$1.37 per pound.
• 🧘 Incremental gains have been observed in the pound's value against the euro, with reduced bearish positions.
• 🫰 The FTSE 100 index is showing signs of a corrective bounce but is in a bearish trend, as indicated by moving averages.

Questions & Answers

Q: What is the expected target for the pound against the US dollar?

The analysis suggests a target of around $1.36-$1.37 per pound, based on the current bullish indications, supportive chart patterns, and low short positions in the market.

Q: How has the pound performed against the euro?

The pound has seen incremental gains against the euro, reaching the strongest level since July 2017. The chart indicates a reduction in bearish positions, as implied volatility in the options market has decreased.

Q: What is the outlook for the FTSE 100 index?

The FTSE 100 index is currently in a broadening top formation, with a recent corrective bounce. However, all moving averages suggest a bearish outlook. The analysis predicts a potential downtrend in the near future.

Q: What is the significance of the Norway sovereign wealth fund's recent actions?

The Norway sovereign wealth fund recently announced its plans to invest in US equities and UK property, corporate and government bonds, regardless of the Brexit outcome. This suggests their confidence in the long-term prospects of these assets.

Summary & Key Takeaways

• The pound has seen a three-phase rally against the US dollar, with a potential target of $1.36-$1.37 per pound. The chart indicates bullish indications and a lack of short positions.

• Euro-sterling has shown incremental gains, with the pound strengthening against the euro. The implied volatility in the options market for pound-euro trades has decreased, indicating reduced bearish positions.

• The FTSE 100 index is in a broadening top formation since the beginning of 2017. It recently experienced a corrective bounce, suggesting a potential downtrend. All moving averages indicate a bearish outlook.