After former Brexit Secretary David Davis resigned amid protest over May’s soft Brexit proposal which will keep the UK aligned to EU rules forever in the areas of goods and agriculture, new Brexit Secretary Dominic Raab met his counterpart Michel Barnier in Brussels to negotiate May’s new proposal. A different name, but the same outcome. Barnier rejected a key part of British Prime Minister Theresa May’s Brexit trade proposal. Following the release of the UK government’s White Paper and amid pressure from other EU members, Barnier last week welcomed the new plan as a positive first step.
This week it appears that we get more of the same Barnier who rejects anything coming out of the UK. After meeting with Raab, Barnier stated during a joint press conference that 'The EU cannot and the EU will not delegate the application of its customs policy and rules, VAT and excise duty collections to a non-member who would not be subject to the EU’s governance structures. I have always said the EU is open to a customs union.' This dealt a blow to the hoped that a trade deal could be reached in October. A full customs union is a red line which May claimed she would not cross as it would essentially render Brexit pointless which is what Barnier would like to achieve.
Another key issue, the Irish border, will also need to be resolved as a hard border was mentioned as another red line by May. Barnier remained cold towards any progress and told new Brexit Secretary Raab that 'The UK wants to take back control, Dominic, of its money, law and borders and you said this point in an article this morning. We will respect that. But the EU also wants to keep control of its money, law and borders and the U.K. should respect that.' It appears that the Barnier tried to turn Brexit around and also took the opportunity to adapt a harder tone with Raab than with Davis as it senses weakness out of the UK and an upper hand in negotiations.
While the British Pound retreated slightly as Barnier did what the EU has done best so far, many forex traders already expected a negative response. Pro-Brexit Tories told May that her customs plan was non-workable and that they could neither support nor implement it. This gave EU negotiator Barnier even less reason to tolerate the proposal. The British Pound is trading near key support levels, where will it move to next? Open your PaxForex Trading Account now and gain access to the exciting world of forex trading!
Brexit negotiations are set to continue in three week’s which gives little time to amend the current deal. The UK as well as the EU have stepped up plans for a no deal Brexit while Ireland said they would back a UK request to extend the time for the UK to leave the EU in order to iron out a deal. According to Article 50, which the UK triggered, a country has two years to negotiate the exit from the EU. The UK is set to leave the EU on March 29th 2019. The final hopes to reach a trade deal in October may hinge on a summit in Austria in late September which will give both sides a final opportunity to discuss the issues. Did Barnier just kill May’s Brexit trade proposal? We will find out over the next few week’s, but here are three forex trades which every traders should have in their portfolio right now.
Forex Profit Set-Up #1; Buy GBPUSD - D1 Time-Frame
The GBPUSD just completed the process of confirming its most recent horizontal support area and pushed above its upper level on several occasions. Negative developments have forced minor retreats which were reversed quickly. In addition a steep descending resistance level, which originated at the top of it next horizontal resistance area, has now intersected support and the GBPUSD is in the process of attempting a breakout which would add bullish momentum to this trading recommendation. Forex traders are recommended to place their buy orders above and below the descending resistance level inside of its horizontal support area.
The CCI has accelerated from extreme oversold territory and bullish momentum was strong enough for a brief move above the key 0 level. A sustained push into positive territory will confirm a bullish momentum change. Follow the PaxForex Daily Fundamental Analysis and the guidance of our expert analysts which will yield you over 500 pips per month. Let us to the hard work so that you can copy our path to profits!
Forex Profit Set-Up #2; Sell EURGBP - D1 Time-Frame
Bullish momentum is breaking down in the EURGBP after price action was rejected by its horizontal resistance area. While the EU and the US agreed to halt its own little trade war with an agreement on car imports, the wider trade conflict between the US and China is set to harm the Eurozone economy. The EURGBP has enough bearish momentum in the pipeline to descend into its ascending support level from where a further breakdown cannot be ruled out. Forex traders are advised to sell the rallies in this currency pair from current levels up to the lower band of its horizontal resistance area.
The CCI already collapses from extreme overbought conditions and bearish momentum has the strength to push this technical indicator below the 0 level which would confirm a momentum change from bullish to bearish. Subscribe to the PaxForex Daily Forex Technical Analysis and copy the technical trading recommendations posted by our expert analysts into your own forex trading account.
Forex Profit Set-Up #3; Buy GBPCAD - D1 Time-Frame
Canada has its own tariff vows with the US on top of NAFTA negotiations plus worries about a decline in the demand of commodities as a ripple effect from the US-China trade war. This makes the Canadian Dollar vulnerable to a sell-off and the GBPCAD represents a great opportunity to profit from such a move. Price action has just arrived inside a solid horizontal support area from where a short-covering rally may lead to a broader advance in the GBPACD. Forex traders should spread their buy orders between the lower and upper band of its horizontal support area in order to capitalize on the expected advance.
The CCI is trading in extreme oversold territory, but a positive divergence has started to emerge which represents a strong bullish trading signal. As this momentum indicator will move above the -100 level, more upside is expected to follow. Download the PaxForex MT4 Trading Platform today and add this trade to your forex portfolio before price action will accelerate to the upside.