Brexit negotiations seem to be going nowhere as per usual, and as a result people are beginning to worry about the British pound again. Ultimately, this is a market that I think has gotten a bit expensive anyway, so it is not a huge surprise to see that it might be ready to rollover. I think the words coming out of the British negotiator did not help the situation either, suggesting that the European Union needs to “evolve its position” to reach some type of an agreement. It has been a while since we had to worry about Brexit, but that clearly will come into focus again as people start to shift attention away from the coronavirus situation.
GBP/USD Video 28.05.20
To the downside, the market looks as if it could go towards the lows again, but it might take some time to get there. This choppiness will more than likely continue, but we are clearly in a downtrend overall. Because of this, it makes quite a bit of sense to start selling, at least on the first signs of exhaustion on a shorter-term chart. The US dollar will continue to be attractive due to the fact that it is not the British pound if nothing else. US Treasuries of course stay strong, so that of course drives up a bit of demand for the US dollar as well. With that in mind, I prefer shorting giving an opportunity.
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This article was originally posted on FX Empire
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