This week will be a crunch week for the UK gov as Brexit negotiations enter the final phase. A new vote on the gov deal is scheduled this week (Tuesday March 12).
Pound Sterling has weakened ahead of this vote. Against the US Dollar, the rate has reverted below 1.300 again (see Featured Chart). This is the first dip beneath the key round number level in five weeks. A ‘risk off’ sentiment, due to weak economic data flow, may have also strengthened the greenback.
Against the Euro, the rate has neutralised its recent upside breakout at 1.160. Choppy trading at 1.16-1.17 suggests that the bulls and bears are evenly matched. Therefore a rebound from 1.150 is possible (see below).
The fortune of Sterling is now closely linked to the political developments in Westminster. In terms of trend outlook, Sterling is amidst a correction within a multi-week uptrend. Should a delay in Brexit occur (by whatever means), watch for large gains in the currency.