Brexit. GBP/USD analysis and forecast for 19 – 23 November, 2018
Brexit is one of the most hot topics recently. Well, I can’t stay away and have to share my opinion. I am not sure how many of you know what is actually European Union and why it was created. So, to understand reasons of political crisis in Europe (yeah, in some way we can consider it as political crisis) let’s come back to history.
Idea of EU creation belongs to former Prime Minister of UK, Winston Churchill. Irony of life, isn’t it? Mr. Churchill saw EU as way to avoid war conflicts. It wasn’t much accepted by other countries. But later Germany and France picked up this idea and changed it’s mission. They decided EU is the best way to make trade deals more easy, in other words it gave them opportunity to sell their goods more easy and on better conditions. Do you remember what happened when EUR was established? – All countries started from zero, not depending of their GDP. Yeah, that’s the reason why Greece, Italy and Spain have lots of problems now – deficit, huge debt ect. But who cares? I am not sure if there is the way to avoid default.
Coming movements of GBP depend on how negotiations will go. But over long-term UK is the winner in this game. Country will have opportunity to negotiate with all other countries in a world directly and take decisions on trade deals. Another plus – UK will avoid all negative impacts of Italian problems etc. So, I think as result Brexit will have positive influence on UK economy and help to grow its economy.
Technically speaking, we have to expect a bit of consolidation near current levels and zig-zag moves. But I see good opportunities for swing traders as well. Market has to test 1.2500 as it was previously important resistance and consolidation area + important psychological number. From this point we can see ABC formation. So, I will be targeting 1.3700. After that we have to see one more leg down to form double bottom near 1.2000. And finally impulsive move to 1.5500. This is long-term technical view based on weekly and monthly charts. We have to take into account fundamentals and keep an eye on it as well. Sure, I will watch GBP and add it to my portfolio in managed accounts.
Good luck and good trading!