GBP/USD – Plunges on Brexit fears

Sterling on the decline again as hard Brexit fears rise

The pound is on the decline again as reports continue to suggest that Brexit talks between the Conservatives and Labour are about to reach an unsuccessful conclusion.

Once again precious weeks have been lost and it appears we’re no closer to agreeing on the country’s exit from the European Union. This uncertainty combined with the prospect of a more hardline Brexiteer – one of which has already thrown his hat into the ring – is unsettling sterling traders.

GBPUSD Daily Chart

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We’ve gone from a situation in which a deal late in the day looked likely to one in which all options, up to and including no deal, may be back on the table. That doesn’t bode well for the economic prospects and the currency may continue to suffer as these options become more plausible. The break below 1.28 against the dollar is a clear sign of the unease being felt, with 1.27 now being the key level below.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.