Home Forex News GBPUSD Drops To1-Month Lows As EURGBP Surges On BREXIT Concerns

GBPUSD Drops To1-Month Lows As EURGBP Surges On BREXIT Concerns

142
0
  • EU-U.K Talks Concerns
  • U.K-Australia Trade Plans
  • Soaring U.K Debt Levels

British Pound weakness persisted, Tuesday morning, sending the GBP/USD pair to one-month lows with the EUR/GBP pair surging to three-month highs. Weakness around the Sterling stems from growing concerns that the U.K is preparing for a no Brexit deal with the ongoing U.K- EU talks looking unlikely to yield results. Soaring debt levels also continue pile pressure on the Pound.

GBP/USD Sell-Off

GBP/USD was down Tuesday morning, having broken through a key support level on Monday. The pair continues to edge lower amidst a strengthened dollar on risk aversion in the market.

Time                            : 06-30-2020

Pivot                           : 1.2314

Technical View           : Short Below 1.2294

Target                         : 1.2274 next 3 targets are 1.2223, 1.2168 and 1.2092

Comments                  : Bearish

Last Price                    : 1.2275

Pound weakness looks set to persist throughout the week as uncertainty over BREXIT talks continues to weigh on traders’ sentiments. Early indication is that the U.K and the EU are unlikely to ink an agreement, a development that has seen U.K Prime Minister start to look elsewhere.

The U.K is reportedly planning for a no BREXIT deal, having already turned to Australia to shrug off some of the losses that might come into being as a result. Johnson is reportedly willing to leave the transition period in Australia terms.

Surging debt levels is another tailwind taking a toll on the British Pound conversely, sending the GBP/USD pair lower. For the first time since 1963, public debt has exceeded GDP to a record £55 billion in May. The U.K has resorted to debt to finance fiscal stimulus programs designed to revitalize the struggling economy.

EUR/GBP Rally

EUR/GBP pair, on the other hand, raced to three-month highs as the Euro strengthened and Pound weakened amid BREXIT uncertainty. A plethora of positive economic data such as inflation levels in Germany helped strengthen trader’s sentiments on the single currency conversely, sending the pair higher.

Time                            : 06-30-2020

Pivot                           : 0.9131

Technical View           : Long Above 0.9151

Target                         : 0.9171 next 3 targets are 0.9191, 0.9223 and 0.9268

Comments                  : Weak Bearish to Neutral

Last Price                    : 0.9057

Technical View           : Short below 0.9111

Target                         : 0.9091 next 3 targets are 0.9074, 0.9039 and 0.8997

On the other hand, the Pound was on the defensive as Brexit talks resumed amidst fading hopes of a deal on key issues such as fishing policy. With both parties refusing to budge and come to a compromise, the likelihood of hard BREXIT is becoming inevitable, conversely fuelling weakness son the Pound.

LEAVE A REPLY

Please enter your comment!
Please enter your name here