Lack of progress underpins Pound

The Pound has taken a dive on Brexit news, with The Guardian citing Labour leader Corbyn saying that there “is no agreement yet” between his side and the government on a compromise plan for leaving the EU. Talks have been ongoing on many issues, but the two big sticking points — the UK remaining in the EU customs union and there being a confirmatory referendum — won’t be discussed until after Easter. That has led to newswires headlines of the talks having ‘stalled’, though in reality they are ongoing, albeit with diminished expectations for the two sides coming together.

Cable dove to a 1-week low 1.3048, while EURGBP lifted to a 2-session high at 0.8653. At the moment, all options remain open with regard to Brexit, ranging from the no-deal Brexit scenario, to a “soft” form of Brexit, to remaining in the EU. A lot will depend on whether Parliament has the inclination for a soft version of Brexit (whereby the UK leaves the EU’s political institutions while remaining economically attached via staying in the customs union or single market, or both), which ex-PM Tony Blair among others, have dubbed a “pointless Brexit” as these forms of Brexit would leave the UK subject to EU rules without having a say in them. The probabilities of a confirmatory referendum to given the public a final say are increasing.

Cable’s next Support is set at 1.3044 and 1.3020, with momentum indicators suggesting further decline within the day. MACD is extending its line lower above signal line while RSI remains below neutral.

Click here to access the Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.