An Update On Brexit & Its Effect On GBPUSD

TL;DR

Cable currency pair has experienced volatility due to Brexit headlines, with potential downside to 128.81 and upside potential limited to 135 ahead of the March 29 deadline.

Transcript

hello it's good to be back once again today I would like to discuss the cable I think it would be a more interesting currency pair because the the brexit headlines at the end of march is looming and there has been a lot of volatility on cables so I think that's a it'll be great to trade Sterling to reap the distillate out swings in the next couple ... Read More

Key Insights

• 🚠 Brexit headlines have contributed to the volatility in the cable currency pair.
• 🈷️ Cable reached a 21-month high in April 2018 but fell to a 20-month low at the start of 2019 due to Brexit concerns.
• 😮 Short covering in sterling led to a rise in cable to a 3-month high at 133.51.
• 🍳 The analysis suggests a potential temporary top at 133.51, with downside potential to 128.80 if cable breaks below 130.00.
• 🙃 The maximum upside potential for sterling ahead of the March 29 deadline is limited to around 135.00.
• 🧑‍🌾 Non-farm payroll data before the deadline can add excitement and potentially impact the cable.
• ✋ Traders are advised to place stops to manage risk in case of unfavorable market movements.

Questions & Answers

Q: What factors have contributed to the volatility in the cable currency pair?

The volatility in the cable currency pair can be attributed to the looming Brexit deadline and the uncertainty surrounding it. Brexit headlines have significantly impacted the exchange rate of GBP/USD.

Q: What is the analysis's view on the potential direction of the cable currency pair?

The analysis suggests that cable has a downside potential to reach 128.80 if it breaks below 130.00. However, if it manages to close above 133.00, there is a possibility of the GBP/USD moving higher towards 135.00.

Q: Will the non-farm payroll data affect the cable currency pair before the March 29 deadline?

Yes, the non-farm payroll data, scheduled before the March 29 deadline, can bring excitement and potentially impact the cable currency pair. Traders are advised to place their stops to manage risk.

Q: What is the recommended trading strategy for the cable currency pair?

Based on the analysis, a short position on sterling is recommended if it recovers to the 132.00-132.50 resistance area, with a target at 128.80-90. However, if the cable closes above 133.00, the risk increases for the GBP/USD to move higher towards 135.00.

Summary & Key Takeaways

• Cable (GBP/USD) reached a 21-month high in April 2018 but fell to a 20-month low at the start of 2019 due to Brexit concerns.

• There has been a significant short covering in sterling, leading to a rise to a 3-month high at 133.51.

• The analysis suggests a potential temporary top at 133.51, with a downside target of 128.80 if cable breaks below 130.00.