GBP/USD: Bears regaining power at value area. What's next? ð
Hello traders. What a day for the pound!
After a strong sell-off overnight which accelerated in the London session (our Trade of the Day closed with a great profit), the pound has now moved towards its previous value area (Point of Control) where the most trades exchanged hands overnight.
Some reports suggest that the call between PM Johnson and Von der Leyen "don't go anywhere", yet bulls pushed the pound higher towards the end of the NY session. The main three obstacles remain to strike a deal: fisheries, level playing field, and governance. Also, Ireland Coveney said there is "no Brexit progress at all and last 2 days".
INTERMARKET
2-year yield differentials haven't recovered like the exchange rate, signaling further downside pressure in the pair. The bearish divergence has been mostly the result of lower UK yields as investors turn to the bond market in times of market stress. So, 2-year differentials remain bearish for the pair.
TRADE PLAN
If Brexit concerns persist, the next profit target is around the 1.3140 area, where I expect a reaction from the market. The trade remains valid if the 1.3420 level holds to the upside.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
After a strong sell-off overnight which accelerated in the London session (our Trade of the Day closed with a great profit), the pound has now moved towards its previous value area (Point of Control) where the most trades exchanged hands overnight.
Some reports suggest that the call between PM Johnson and Von der Leyen "don't go anywhere", yet bulls pushed the pound higher towards the end of the NY session. The main three obstacles remain to strike a deal: fisheries, level playing field, and governance. Also, Ireland Coveney said there is "no Brexit progress at all and last 2 days".
INTERMARKET
2-year yield differentials haven't recovered like the exchange rate, signaling further downside pressure in the pair. The bearish divergence has been mostly the result of lower UK yields as investors turn to the bond market in times of market stress. So, 2-year differentials remain bearish for the pair.
TRADE PLAN
If Brexit concerns persist, the next profit target is around the 1.3140 area, where I expect a reaction from the market. The trade remains valid if the 1.3420 level holds to the upside.
Please hit the "LIKE" button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
