GBP Weekly Forecast – Key Week for Brexit Negotiations

9/28/2020 02:54:00 PM

Key round of Brexit talks

  • PM Boris Johnson has threatened to break off talks if no deal is reached by October 15
  • EU’s chief Brexit negotiator, Michel Barnier, and his British counterpart, David Frost, will meet in Brussels on Tuesday
  • Sticking points include which state aid rules the U.K. will follow and the EU bloc’s access to the U.K.’s fishing waters
  • Enough progress will lead to intensive “tunnel” talks that could produce a decent deal in time for the EU Summit on October 15
  • Negotiators and outside observers have expressed cautious optimism on this week’s negotiations results

Technical snapshot

  • The pound has lost value against ALL of its major counterparts in the last month
  • It lost the most value against the yen, dollar, and the Loonie
  • Stochastic is flagging GBP’s “overbought” conditions against AUD
  • GBP/USD and GBP/JPY are both in “oversold” territory
  • EMAs reflect the short-term bullish pressure across the board
  • GBP/JPY and GBP/CAD are still mainly bearish on the daily time frame
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