The British pound gave up all of its general election rally on weaker than expected labor and wage data and on expectations that PM Johnson will change the law to prevent ministers from extending the transition phase and thus resurfacing no-deal Brexit risks to the end of 2020.
Pound optimism is quickly fading as Boris Johnson’s free trade deal goal with the EU seems very unrealistic. Johnson wants to wrap a trade deal in 11 months following a January 31st exit, following the path set by the CETA agreement which took Canada and the EU seven years to negotiate. Johnson’s historic victory is giving him confidence that he can be aggressive in negotiations with the EU and trying to push his agenda through Parliament.
How To Trade Forex Using Support and Resistance Levels
Pound will likely trade rangebound but could start to see further pressure as a wrath of softer economic indicators are raising the bar for the BOE to ease. The British pound took out the 1.3250 and could see downward pressure target the 1.3000 but could eventually look to retests last week’s highs around 1.3500 more so on a weaker dollar.
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