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 Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam