Pound selling strategy, Prime Minister May cornered! ~ Pound selling strategy on November 12 ~

◎ Current positions and strategy

Pound selling strategy

GBP/USD Short Position”1.2930” to enter a new position.

”1.2900” ”1.2880” to enter a new position or add position

Stop ”1.3080”

Take profit target ”1.2810” or ”1.2700”

◎ Outlook

Last week, Prime Minister May explained the Brexit plan to British MPs and sought their approval, but was opposed. Also, four British ministers are rumored to resign.

At the start of last week, there were reports of progress in Brexit negotiations, claiming that the withdrawal agreement was 95% complete, which caused a large rally in the pound. However, it is unclear whether the remaining 5% can be completed, as there is no agreement on the Irish border issue.

And the biggest issue is the Irish border problem, so even if progress is made elsewhere, if the Irish border issue is not resolved, everything may become moot.

↓↓↓ For the Irish border issue, please see below ↓↓↓

Irish border issue ~ The most difficult part of Brexit negotiations ~

In this situation, Foreign Secretary for Transport Joe Johnson (Boris Johnson's brother) resigned. Former Foreign Secretary Boris Johnson criticizes Prime Minister May.

It seems May will suspend the cabinet meeting to seek approval for the withdrawal agreement.

The pound, which had risen on positive sentiment about Brexit negotiations, may retrace all of its gains. Also, if Prime Minister May resigns or if Brexit negotiations lead to a no-deal exit, there could be further selling.

Today the pound/dollar has opened higher, but has retraced more than half of last week’s gains.

GBP/USD Time-frame chart

GBP/USD Daily chart

“Half retracement equals full retracement”

Sounds familiar… right?!

For now, since the direction matches my view, I have entered at the half retracement line.

This London session, until additional information emerges, I plan to pursue a short position on the pound.

Reference information

Four British ministers to resign; EU rejects May’s customs plan, reports say

British ministers propose new plan for May assuming no-deal Brexit, according to British newspaper

Brexit negotiations with the EU near “total capitulation” — former foreign secretary Johnson

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