Brexit Outlook and Sterling (GBP/USD) Price, Analysis and Chart:
- Talks continue but no-deal fears increase.
- Sterling may struggle to move higher in the short-term.
The EU and UK need to make progress on a post-Brexit trade deal fast with the timeframe for ratifying any deal disappearing fast. While both sides say that some progress has been made, the main sticking points – fisheries and a commitment to a level playing field – remain and unless there is real movement here this week then a no-deal becomes much more likely. There have been suggestions that this Thursday’s EU leaders meeting may be crunch time for striking a deal although other reports suggest that talks could extend to early December if a deal looks likely.
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UK PM Boris Jonson is said to be launching a wave of initiatives this week, a party reboot, after both his director of communications, Lee Cain, and his chief adviser, Dominic Cummings, left their roles abruptly last week. The PM will have to now do this while self-isolating at No.10 after he came into contact with a Conservative MP last week who subsequently tested positive for Covid-19.
GBP/USD is edging lower after having traded as high as 1.3242 this morning. The outlook for Sterling remains mixed and will likely remain so as talks continue. The daily chart set-up is positive from late-September onwards with a series of higher highs and higher lows made from the September 23 low of 1.2670. The 20-day sma pushed through the 50-day sma late last month, adding a further positive boost, while cable also trades above all three simple moving averages. Support is seen off recent lows, and the 20-day sma, between 1.3092 and 1.3110.
GBP/USD Daily Price Chart (March – November 16, 2020)
of clients are net long.
of clients are net short.
IG client sentiment data show37.69% of traders are net-long with the ratio of traders short to long at 1.65 to 1.We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise.Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse lower despite the fact traders remain net-short.
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