Brexit hurts GBP & FTSE
this is more of a twitter post then a forum post
You’re a couple of days too late, the big drop was Monday
I doubt that was the last big GBP/USD drop we’ll see in the coming days or weeks though.
…because the fundamental outlook from the BoE is still going for a rate hike as the next move…
The fact that it may not be in the next few months (or longer) does not matter…
The Brexit moves are quickly running out of steam and the real story, which is the deleveraging
of financial markets (e.g. stock market collapse), is certainly what is at play here…
The fact that the LSE and Frankfurt Borse are in talks to merge should be of more interest
than the feeble deals made by a tired prime minister who should know better than to play
the Farage card with the UK’s future.
But not as much as it will surely hurt the Euro, in the long run, if it happens?
I suspect it’s “uncertainty” rather than Brexit-potential [I]per se[/I], that’s causing the decline?
According to most economists, Europe is the only continent whose overall economy is currently in decline (yes, I know it’s a contentious and slightly definition-dependent statement, but it seems to be very widely accepted by those who at least [I]ought[/I] to know).
I would think so; yes.
Well, arguably that did contribute to his winning an election which the polls thought unwinnable? But even so, it appears that there’s a risk he may have bitten off more than he can chew, over it, albeit partly in an attempt to assuage his own backbenchers? The major polling companies seem to be saying, at the moment, that Conservative [I]party members[/I] are about 70/30 in favour of Brexit, at the moment (not that they’re necessarily representative of Conservative [I]voters[/I], of course).
The LSE and Frankfurt Bourse have been in merger talks several times over the last couple of decades, and presumably they wouldn’t come to fruition this time, just as before, in the event of Brexit? Perhaps Germany, rather than the UK, should leave the EU? :27:
Hello Lexy! Good to see you back!!!
As ever, your arguments are spot on… I did not know that the LSE-Börse merger was not new, but this time it looks like it may be good to go… In this case, I doubt that the relative sides would want to upset this new Super-Börse too much, and may opt for special measures to safeguard free flow of capital… I am guessing!
PS: for anybody who wants to read two good threads on a previously-bearish GBP, please see the following…
I wonder what happened to Kashif…
Regardless of the current correction of the GBPUSD to the 1.400 level, the pair keeps its bearish trend and it could go back down.
A further drop is always possible but I think we might have wait out a long consolidation before that happens.
the Pound were to fall [B]BELOW 1.40[/B]?
If the GBPUSD breaks below the 1.4200 level, then the 1.4100 may act as support. To the upside, the 1.4300 may act as resistance.
thank you, Fxstrategist…
It depends what is meant by ‘breaks’…
GBP/USD has already gone down below 1.40 in the last few weeks, by a fair bit (around 1.38 at the end
of February), but… was this a breakout or ‘fakeout’?
Short-term: a definite break; long-term: not at all a break, because now the Pound is at 1.42 against the USD…
The pound versus the dollar seems to continue heading lower, the pair may finish its bullish retracement and go back down.
Long bearish daily candle for the GBPUSD today. Possible continuation to the downside.
Looking at the UK (10 year) Gilts chart, which has a profound influence on Sterling,
I noticed that the inverse correlation is still very strong; in this monthly chart, which
I accessed on Investing.com, you can see that the top line (pink, solid) marks a supply
zone for the UK Gilts that has provided resistance in 2009 and 2015, and that price has
come back to closing below it; the 2009 and 2015 tops coincided with GBP/USD bottoms
(along the brown, dotted line at the bottom of the chart), and you may see how the
current situation is for the GBP/USD to appreciate off that bottom and for the Gilts to
depreciate off that top.
PS: in the chart, the candles show the Gilts and the purple line shows GBP/USD.
The GBPUSD finds a good resistance around the 1.4500 level. Above that level, the 1.4600 could act as resistance. The 1.4300 level could act as support.
On the daily chart of the GBPUSD we can see that the pair has been in a consolidation which is getting tighter.
Cable has been a choppy job for months, EUR/USD-style, mainly due to the indecisiveness of both BoE and the Fed… The recent fall does not change much, to be honest…