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Pound Should Save Its Strengths

This week will surely be the most emotional time for the United Kingdom and its currency.
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RoboForex is an international brokerage company offering its services to clients in various countries across the world. The company provides traders with access to its proprietary trading platforms. RoboForex Ltd is a licensed company (License No. IFSC/60/271/TS/17). To learn more about RoboForex, please go to www.roboforex.com.

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

This week will surely be the most emotional time for the United Kingdom and its currency. On Tuesday December 11th, the British Parliament will vote on approving the Brexit agreement with the European Union. Earlier, the European Commission agreed principle terms of the document and now comes the most difficult part – to make British policymakers approve it. There are many opposition-minded members in the British Parliament, who have been criticizing the Prime Minister Theresa May’s plan from the very beginning. Nevertheless, her plan is considered as a “soft” exiting strategy, others are reported to be much worse.

Investors have a lot of doubts that policymakers will approve the agreement on the first try. There is a chance that no decisions will be made on Tuesday: it has been well rumored on the market that the voting might be postponed. However, the delay will hardly change anything: the United Kingdom will either exit the European Union with minimal losses or have to follow the “tough” scenario and damage the country’s economic and financial system.

There will be many reports from the United Kingdom in the economic calendar this week; however, investors might not pay a lot of attention to them due to the Brexit-related news.

The most interesting numbers will be the Industrial Production and the GDP in October, along with the CB Leading Index and several reports on the British Labor market.

In case of GBPUSD, the descending tendency continues, but not very quickly. The downside target may be the support line of the major channel at 1.2525. At the same time, there is a convergence on MACD, which may indicate a new impulse to the upside as a correction of the mid-term downtrend. However, such correction may start only after the price breaks the current short-term resistance at 1.2780. The target of this ascending correction may be the resistance level of major channel at 1.3040.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.