Brexit is becoming a more and more uncertain event with the potential outcomes changing by the day. In some cases, the pound has been untradeable as investors avoid the currency for fear of being wrong footed by any sudden shifts in the currency markets. GBPAUD levels have been excessively volatile in 2019 and since the EU Referendum vote in 2016, it appears likely that the volatility could continue until the end of March and into April.
GBPAUD levels have ranged between 1.77 and 1.88 this year, presenting fresh opportunities for clients with positions buying and selling the currency pair. The general widsom of ‘buy on the way up, sell on the way down’ has seen the 1.80 and 1.90 pivot points and important levels of resistance, remain in focus.
Overnight, the Brexit negotiations in UK Parliament continued with investors being pushed back and forth over the ongoing developments. The world was waiting on tenterhooks to see if we would be uncovering some fresh steps on Brexit. Unfortunately, we now have further options on the table which might see the pound stronger in the longer run, but which have not helped matters overnight.
Optimism that a deal could be struck on Mrs May’s Withdrawal Bill failed as despite the expectations we would have backing from pro-Brexiteers like Boris Johnson and Jacob Rees-Mogg, the Democratic Unionist Party (DUP) continued to state their objections.
The pound has been languishing at lower levels compared to more historical prices on the GBPAUD pair; we could see it rise higher if no-deal continues to look like it is less likely.
Important events in China and also with the Trade Wars will be in focus as investors seek to gauge what lies ahead for the Australian economy. This might well see the pound rise further against the AUD if it appears that the Trade Wars are weighing on global economic sentiment.
If you’d like to discuss these factors in further detail, please don’t hesitate to get in touch using the form below. I’ll be happy to respond personally and discuss your enquiry.