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Forex For Beginners – How To Trade EURGBP! Buying The Euro With A No Brexit Trade Deal!

For beginners – How to trade the EURGBP with no trade deal Brexit 

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Great Britain voted in a national referendum to leave the European Union June 2016.  The  United Kingdom officially left the EU you in January 2020 with a one-year transition period which ends on the 31st of December 2020.

This was to allow the EU and the United Kingdom four years to come up with a future trading solution with regard to laws and arrangements which would allow the United Kingdom to take back its sovereignty, which is what the people of Great Britain wanted.

However, unravelling the years of business ties between the two areas, including laws,  fishing rights,  humanitarian issues,  worker’s rights,  competitive fairness,  financial regulatory alignment, including a whole myriad of rules and regulations has been one of the most complicated issues in modern times.  The affair is turning into an acrimonious divorcAfter the transition period, theThe two sides agreed thod they would work towards having a free trade agreem,ent which would lead to an almost seamless continuation of business.

But the United Kingdom claims that many of the terms and conditions as set out by the European Union in order to grant a free trade agreement to the United Kingdom are seen as not acceptable to the British government.  Some of these conditions are centred around fishing, where the EU wants to continue fishing in British sovereign waters, a so-called level playing field,  where the United Kingdom cannot go out and sign up other trade agreements around the world by undercutting EU member states.  And where the EU has said that any breach by the UK of such a future agreement, or where the EU changes regulations, and the UK does not fall into line, would be penalised by tariffs and which the UK has said this is totally unacceptable.  Ten deadlines have come and passed between the two sides regarding reaching an agreement,  and where currently, at the time of writing,  there are just a few days left to instigate and agreement,  and where both sides are saying this is now very unlikely to happen.

This is a daily chart of the euro to Great British pound pair ,or EURGBP,  and where we can clearly by the blue candlesticks that since the latter part of November 2020, the Euro is gaining in value on the exchange rate.  

Investors believe that the sentiment has changed in the latter stages of November and certainly since the 7th of December, and  where they believe that in the current state there will likely be no deal and therefore because the European Union is economy is much greater than that of the United Kingdom that the Euro will fare better than the pound in the event of a no tariff-free arrangement being reached.

In in the same chart we have highlighted a section A,  where the pound was gaining against the euro since August,  because the market considered that an agreement would be reached.


 So how can investors get in on the action and ride the pair hire based on current sentiment?

Firstly, we need to bring the chart down to a smaller time frame, such as the one hour.  Here we can see a defined bull channel, with areas of support at two points and areas of resistance at two points as show by the exchange rate touching the two purple lines, and where we might consider going long at a pull-back to the support line, perhaps somewhere around the X mark.  

By reverting back to our daily chart we can see some potential targets, or areas of resistance, the closest is 0.9294  which was reached in September 2020 and way back in  the middle of March this year, where we have a target/resistance level of 0.9500.

Of course the exchange rate might be a little different by the time you get to view this video, however, should there be a no tariff deal agreement and where the United Kingdom crashes out of the EU on world trade organisation rules, where tariffs will be imposed by either side,  but most likely to be more detrimental to the UK than the EU, you should then be looking for setups such as we have shown today to buy the pair.

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Forex & The Brexit Conundrum – How You Can Trade the Outcome and Make Insane Profits!

The Brexit Conundrum, how to trade cable?


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In this session, we will be looking at the Brexit conundrum,  where Great Britain, which has left the European Union, will have completed its transition period on the 31st of December, and which this date is enshrined in law, and cannot be moved, unless by an act of legislation, which is completely unlikely, bearing in mind the government’s stance on sticking to this date.

British businesses and Europeans too, are bitterly disappointed that a formal no trade deal has not so far been agreed between the United Kingdom and European Union, where the two sides seem to be at loggerheads over fishing rights,  and the so-called level playing field where the European Union is worried that the United Kingdom might undercut European businesses when the UK forms trade deals with other countries around the world, once the transition period ends.

This affects UK businesses who simply do not know whether they will be levying tariffs against the EU should a free trade deal not be set in place, and whereby they are simply not in a position to know which types of rules and regulations they will be following on the 1st of January 2021.

Rumors and speculation are driving the financial markets, where one moment the two sides are close to implementing a free trade deal, only to be scuppered by officials on either side saying they are still miles apart, but where while there is hope that an 11th-hour free trade deal can be completed. Traders are looking on the positive side, and this is reflected in the British pound, here seen on a one-hour chart of the GBPUSD pair where it is most widely traded.

The swing in price action between positions A B and C is over 400 pips during the 10 days of trading here. These are significant moves. But interestingly, we can see that price is largely conforming to within two key levels, 1.31 and 1.33, with a slight bias to the upside. A and C is a classic double top reversal formation.

Here we have highlighted the pullback from position C to position D, which has respected the 1.3200 line after the pullback. It is a 50% retracement of the earlier move from A to B, and this is significant because traders believe there will be a last-minute attempt to close a free trade deal between the two sides, who are playing this situation like a game of poker, and where neither side wants to be the first one to blink.

So where next for the pound?  Certainly, if a free trade deal is agreed on, the pound should strengthen against the dollar.  Some analysts predict moves of to 1.400, should a free trade deal be agreed on. But price action could revert lower to potentially to 1.2500 should the UK leave on WTO rules.


Any trading on the pound should be done with the utmost caution and with tight stops in place. Look out for moves in price action to these key trade levels, which are round numbers, and use them in your trading setup.  Expect volatile price action the longer this is drawn out, bearing in mind two deadlines have already been passed, one being the 15th of October as set down by the British government’s and more recently the middle of November, which were deemed necessary to implement new legislation pertaining to a possible free trade deal.   And wherever possible, instigate break-even stop-outs on your trades.


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Has Time Run Out For The BrexitFuture Trade Deal? GBP On The Ropes!

Has time run out for the Brexit future trade deal? Where next for the Pound?

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The British government set itself a deadline of 15th of October with which to had a formal future, a tariff-free trade deal with the EU by the 15th October 2020.
That deadline came and went and was subsequently extended to the 13th of November, where, at the time of writing, no such agreement is in place. The United Kingdom is set to leave the European Union transition period on the last day of 2020. With both the European Union chief negotiator Michael Barnier, and the UK’s chief negotiator on this issue, David frost, both proclaiming that the other side needs to move on key issues such as fisheries, I need a so-called level playing field, it is highly unlikely that a deal can be reached in time I’m for the legal framework to be set in place whereby any such new tariff 3 agreement can be implemented on the 1st day of January 2021.
So, what are the options? The UK government cannot extend the negotiation period because the end of the transition period date is set into law. And so if they will not budge on the requirements and terms of a future trading partnership with the EU, it will appear that the British will be leaving on WTO, or world trade organization, terms, and it is perceived that this would be bad for the British economy, whereby a tariff-free arrangement with the European Union would be in the best interests of both sides because it would offer a smoother, future, trading arrangement.
Let’s have a look at how this is being played out in the forex market, where the most widely traded British pound pair is the GBPUSD.

This is a daily chart for the pair. And we note and expansive bull channel, which has been conforming since the middle of May 2020. This tells us that price action has been fuelled by the potential of a future tariff-free trade deal with the EU. The overall price action has been to the upside. Although this has been waning since early September, such as position ‘A’ and the most recent high was at 1.33.

However, if we bring that daily time frame down to the 4-hour chart, we now see that although price action was waning to the upside at position A on the 1-hour chance, price action for that period has been conforming to an expanding bearish channel on the 4-hour chart.

Now let’s look at what has been happening for the pair are on a 1-hour chart over the last 8 days. Here we can see that price action has been conforming to this triangle where initially we have a bull run up to a peak of just above 1.3300. Since then, price action has been falling lower, to just above 1.3100, and where price action is now conforming to the fundamentals with regard to the potential of a no tariff future trading arrangement deal Brexit.

As time runs out, with no sides giving up any grounds in order to compromise for the sake of a future tariff-free trading relationship, the pair will continue to come under pressure to the downside, in which case the pound is likely to lose value against its counterparts and especially with the United States dollar, notwithstanding the fact that the US economy is suffering because of the covid pandemic and where 150,000 cases were reported in a single day this week, heaping more pressure on the federal government to find fiscal solutions to this problem, which is not going away anytime soon.

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FOREX – Will Fishing Be The Boot To The Throat For A Brexit Trade Deal? GBP Looking Bleak!

Will fishing scupper a Brexit trade deal between the UK and EU?

In this session, we will be looking at the topical issue of the ongoing Brexit talks between the EU and UK regarding the future trading arrangement, where the United Kingdom is seeking a new future tariff-free trade deal.

One of the reasons why the United Kingdom chose to leave the European Union was because of the pressure the government was put under by the fishing industry in the United Kingdom, who saw fish stocks depleting heavily because the EU has the right under the old agreement of fishing in British waters. A system of quotas dividing up specific stocks goes back to the 1970s, and the UK fishing industry says it was a bad deal for British fishermen. This has been very a very contentious issue for many years.

The British government wants to set a limit around the United Kingdom’s coast of 12 nautical miles, which will be an exclusion zone for EU fishermen to enter, without a formal new quota arrangement in place as a part of the future trading relationship.
Currently, under the Common Fisheries Policy, European boats are still allowed to fish in British waters, and British boats are allowed to fish in other European countries’ waters until the UK formally leaves the EU on the 31st of January 2021. Until then, it is still bound by the European Union rules pertaining to the fisheries policy.
The EU and UK are at loggerheads with regards to access to UK territorial waters, which are important because they offer a bountiful supply of fish.
The German and French governments have issued statements saying that they will not alter their position with regard to their firm stance on future access requirement to British territorial waters and where the two are trying to battle out a quota arrangement which would form a part of any future trading relationship.
Both sides say that the bridge is just too wide between what is being offered from either side in order to be able to move forward and close the future trade deal and where Britain has set a red line for the 15th of October, whereby if no such arrangement is set in place which would allow time for the agreement documentation and laws to be set in place, it would not be able to have everything done in time for the end of the current transition period. Boris Johnson has said he will walk away from a deal if talks are not completed by the 15th of October.

This is causing major volatility on the British pound as the 15th October deadline looms, and the pound is beginning to gain ground against the United States dollar and his firming against other currencies because traders and analysts and economists believe that the two parties will be able to come to an agreement in time. If not, the United Kingdom will leave the EU on the 31st of January with no formal agreement in place with the European Union and will enter into world trade organisation trading arrangements with the EU.

Other problems have also to be finalised, such as Northern Ireland where no border exists between the North and the South, which remains a part of the European Union, and which leaves itself open to the unchecked and unregulated movement of people, animals, and goods, between the two countries, and other areas including market standards and practices throughout the various sectors.
One thing is for sure volatility will continue you right up until the wire and potentially be locked beyond when boundaries are pushed, and potentially deadlines may have to be shifted if realistically some kind of deal can be done.

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Forex & The Brexit Conundrum!

The Brexit Conundrum


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In this session, we will be looking at the Brexit situation and how it is unfolding, and the disparity between the British pound and the FTSE 100 index.
Here is the FTSE 100 index and where we can see 3 peaks that are falling, from a high of 6,500 to the current level, at the time of writing, at 5,960: a gradual trend lower since June 2020

Here is a chart of the British pound against the United States dollar and where we can see during the same time period the pound has been extremely bullish against the dollar from 1.2200 to up to a peak of 1.3400 to its current trading range at 1,3284 at the time of writing.
This tells us a story that the pound is bullish, and this is largely due to US dollar weakness and where traders have been riding the wave upwards, following the trend, in a which has been fairly typical where US dollar weakness has been seen across the board and particularly with the other major currencies. So, we have bad continuing economics from the USA and bad US dollar sentiment.

However, if we revert back to our ftse100 chart, the same sentiments cannot be applied to the British economy, and this is typical because of one reason: fund managers do not act out of sentiment in the same way as currency traders so. Fund managers will typically take a more long-term view, and this, of course, must factor in the Brexit situation. And herein lies our conundrum: one set of traders is buying the pounds, and another set is selling UK equities, and mostly because of the risk of no trade agreement being reached between the European Union and British governments regarding a future trade deal. This has largely been put down to the European Union wanting more leeway regarding fisheries and European fishing vessels being allowed to fish in British waters and also so with regard to standards being maintained across the board between Britain and Europe within the financial services sector and other areas such as food. Both sides have red lines, which neither are prepared to budge from and where there seems to be a breakdown in the negotiations with Michel Barnier and his British government counterpart, David Frost.
Time is of the essence, and it is said that a deal must be reached by the end of October in order for the future trading relationships, including zero tariffs on either side, being implemented. Should an agreement not be reached, Britain will be left to trade outside of Europe on world trading organisation rules, which are not as favourable to Britain as they would be with no tariff arrangement with Europe.

Michel Barnier has made it clear that unless standards are unified across the board, and the UK are willing to move their red lines on fisheries, it could cause trading problems and frictions, even where buy British lorry drivers might not be allowed to pass through Europe.

So, where does this leave things? Pretty much hanging in the air. The strength of the pound belies the uncertainties regarding the future arrangements with the European Union. Both sides are up against it in terms of time, and if neither side will budge, there is a distinct possibility of a no-deal trade arrangement between the two nations.
And so what might we expect? If it comes down to the 11th hour, so to speak, and there is absolutely no trade agreement between Great Britain and the European, the party might be over for the British pound, which could suffer to the downside against counter currencies.
We might also see a further sell-off on the FTSE 100. AS time gets closer, it will be wise for traders to be extremely cautious while trading both of these assets. Incorporate tight stop losses and reduced leverage.

Forex Market Analysis

The Pound Sterling in Focus This Week

The Pound Sterling in focus this week

The pound hit the buffers at the 1.3440 today, just prior to the manufacturing data release which was a miss for April (the second consecutive monthly miss). With manufacturing being the third largest economic sector it can cause an impact on the overall expectations for GDP growth.

The UK’s goods trade balance widened faster than was expected too, and with the construction sector coming up short on data expectations, it was no wonder the Pound spiked lower to 1.3348 on the release before settling around the 1.3365 level at the time of writing.

But the real jitters are due to a host of further data releases coming later in the week, including key employment data, inflation related data, RPI and PPI and retail sales. Plus the UK Prime Minister Theresa May faces a series of votes in the House of Commons on the 12th June on whether to approve 15 Brexit amendments inserted into the EU Withdrawal Bill. If the Government loses one of the key votes it could pave the way for parliament to have a ‘meaningful’ say in the final Brexit deal, and thus potentially leading to a ‘soft’ Brexit.

Plus of course, we have the Fed interest rate decision to look forward to on Wednesday.

Therefore, I would expect many GBP institutional traders to be sitting on the sidelines this week.