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EU Leaders Not Optimistic About Brexit Deal
Written by: PaxForex analytics dept - Thursday, 20 September 2018 0 comments
After UK Prime Minister Theresa May delivered a 10 minute dinner speech last night to her EU counterparts over dinner, the mood is not what many hoping for a Brexit deal would wish for. She asked for more concessions, especially when it comes to the Irish border issue, in order to convince many in her own party that the Brexit deal negotiated is a good one. EU leaders showed no signs of giving concessions to May and the UK and in general struck a pessimistic tone on Thursday in Salzburg.
Leading the pessimistic group was, as has been throughout Brexit negotiations, France. President Macron stated 'In the short, medium and long-term, we must defend the interests of the EU. Brexit mustn’t put the integrity of the single market at risk.'. He further asked EU leaders to remain united in not giving the UK any favorable concessions while asking the UK to resolve the Irish border issue in a manner which satisfies the EU. German Chancellor Merkel sounded equally pessimistic and unimpressed by May’s plea.
France insists that the UK needs to lose something from Brexit, be punished for exercising its democratic, sovereign right. The fear is that other countries are watching how Brexit will unfold before possibly joining with their own EU exit strategies. This would severely weaken Project EU which France and Germany desperately need to succeed. The worst development for France and Germany would be for May to be replaced as UK Prime Minister and replaced by a hard-line Brexiteer.
May potentially faces a leadership challenge during the Conservative Party conference scheduled for September 30th which will last four days. Tory rebels gave her until then to drop her current Brexit approach. Boris Johnson is currently the favorite candidate to succeed her. How will the British Pound react in such an event? Open your PaxForex Trading Account now and build a portfolio today in order to profit tomorrow.
Jean-Claude Juncker, the European Commission President, stated that a Brexit deal is far away while Irish PM Varadkar added that no progress has been made since March of this year. May ruled out that the UK will remain part of the EU longer in order to give negotiations more time. A special summit at some point between November 5th and November 13th is now regarded as the last deadline for a Brexit deal to be reached or the UK will exit the trading bloc on March 29th without a deal. EU leaders are not optimistic about a Brexit deal, but here are three forex trades for a profitable outcome.
Following a surge in bullish sentiment in the British Pound, on the back of better than expected economic data, the GBPJPY moved into its horizontal resistance area. This is expected to slam on the breaks in the current advance as more pessimism surrounding a Brexit deal has emerged which may give investors and excuse to realize floating trading profits. A corrective phase is expected to take the GBPJPY back down into its next horizontal support level and forex traders should spread their sell orders inside its
Bullish momentum in the EURNZD started to deflate after this currency pair advanced into its horizontal resistance area. Price action is currently in the process to attempt a breakdown below the lower band as its primary ascending support level adds additional pressure. A move below this level will clear the path for the EURNZD to descend back down into its next horizontal support level and forex traders are advised to sell the rallies in this currency pair in order to take advantage of the attractive downside potential.
Silver offers a great hedge to any currency position. This precious metal is on the verge of a breakout above its horizontal support area. It has already eclipsed its primary descending resistance level which intersects its support level. This added a surge in bullish momentum to Silver and a breakout above the upper band of its horizontal support area will take price action back into its next horizontal resistance level. Forex traders are recommended to spread their buy orders between the upper band of its horizontal support area and its primary descending resistance level.