GBP/USD Reacts to Brexit Developments
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28 August 2019
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GBP/USD Reacts to Brexit Developments
Prime Minister Boris Johnson’s decision to prorogue Parliament ahead of the October 31 Brexit deadline has sparked significant market reactions. With Queen Elizabeth’s formal approval of the move, the pound experienced sharp volatility, plunging to a daily low of 1.2189 before staging a partial recovery.
Daily Chart Overview:
On the daily chart, the GBP/USD remains in a bearish trend, trading below the main daily simple moving averages. The pair has shown signs of recovery in the past two weeks after hitting a yearly low of 1.2015 in 2019.
30-Minute Chart Analysis:
The 30-minute chart illustrates the immediate market reaction following the announcement of the prorogation. The pound dropped sharply from 1.2281 to a daily low of 1.2189 within an hour. Following the initial spike, GBP/USD rebounded to 1.2247 before resuming its downward movement, currently trading at 1.2209.
Outlook:
The GBP/USD remains under pressure amid ongoing Brexit uncertainties. Further downside risks persist if political tensions escalate or no-deal Brexit fears intensify. Conversely, a break above 1.2250 could provide short-term bullish momentum. Traders should closely monitor developments in the UK Parliament and Brexit negotiations for potential trading opportunities.
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