Two important events are taking place this week:
- UK is due a new Prime Minister – probably Boris Johnson
- ECB Meeting – with a potential rate trim
The latest conservative PM selection is extraordinary. Intense political fighting around Brexit has already begun even before the new PM steps into Number 10. The fact that Boris Johnson is espousing ‘No Deal’ is leading to multiple ministerial resignations – and a Parliament vote last week.
Boris Johnson’s view is also alarming traders, who fear the economic fallout from a No-Deal Brexit. Hence Pound Sterling is still pinned to the floor.
Just earlier, I wondered if Sterling may have found temporary floors at its near-term lows. Over the course of a week, some pairs did; some did not. Uncertainties are still swirling around the new PM; while UK’s macro headlines are projected to be weak. Technically many GBP rates are locked in grinding downtrends.
So unless the new PM announces policies that are ‘growth friendly’, Sterling may continue to roll in the current choppy – and negative – state for a while longer. I update some new technical support levels on selected GBP rates.
GBP Near-Term Floors (Updates)
GBPUSD – 1.240
GBPEUR – 1.110
GBPJPY – 134.0 (new)
GBPCHF – 1.220 (new)
GBPCAD – 1.620 (new)
GBPAUD – 1.776 (new)
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Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.
Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University.