The GBP / USD pair is unable to rise higher because of the tough negotiations related to Brexit. Quoting Bloomberg, Wednesday (8/5), at 6:30 a.m. WIB, GBP / USD was in the range of 1,3008 or fell as much as 0.51%. Analysts see an opportunity for further weakness tomorrow.
We suggest that the protracted Brexit issue that has not been resolved further shows the outlook that Theresa May is threatened to lose her position as Prime Minister of England. After a peak agreement in Brussels which stated that the UK has time to leave the European Union until October 31, 2019, it seems the plan will leave.
“May is considered unable to provide an agreement that can be agreed upon by the opposition party. In the midst of the lack of important data releases that can add high volatility to GBP / USD, it seems that the Brexit issue is still a negative sentiment,” as predicted by our analyst.
Not only that, conditions that helped weaken the pound in the eyes of market participants also came from banks in the UK which would shift their business to other places.
Reuters quted that only six of the 11 of 17 British and global supported the idea of a repeat vote to break the parliamentary impasse in the separation of Britain from the European Union.
Four banks said they opposed the new vote, while one bank said it would remain agnostic on all Brexit scenarios and would allow the ongoing political process.
To prepare for Brexit, the bank has transferred billions of pounds to new EU legal entities and shifted around 2,000 roles from London to new hubs in cities including Dublin, Paris, Frankfurt and Madrid.
While the condition of the dollar also did not strengthen the market players because of the threat of Trump to increase the import tariff of Chinese products from 10% to 20%.
We project, GBP / USD will continue to fall. It is estimated that tomorrow GBP / USD will move in the range of support 1.2990 – 1.3015 – 1.3040 and resistance range 1.3100 – 1.3120 – 1.3150. We recommend sell on strength.