Sterling skyrockets as Theresa delivers
|The Sterling staged a sharp rebound during trading on Tuesday following Prime Minister Theresa May’s keynote Brexit speech which provided investors the clarity long sought on the Brexit developments. The speech meticulously outlined the 12 objectives to a Brexit with Theresa acknowledging that a transitional deal would be probable in a bid to avoid a Brexit cliff edge for business. Although Theresa also proposed to remove the UK from the EU’s customs union in the pursuit of a clean Brexit, this will be replaced with a new customs agreement with the EU. A key talking point and comment that played a critical role in the Sterling’s resurgence was how Theresa promised a parliamentary vote on Britain’s deal to leave the EU. Overall, the speech provided investors some direction on how the UK government plans to tackle Brexit with the optimistic evaluation of the UK’s exit negotiations rekindling investor attraction towards the Sterling.
The swift change of events has turned the GBPUSD bullish on the daily charts with prices trading over 350 pips higher from Monday’s three month low as of writing. A decisive breakout and daily close above 1.2350 could encourage a further incline higher towards the next relevant resistance level at 1.2500. A persistently weak Dollar created from the rising Trump uncertainties could elevate the GBPUSD higher this week with technical traders carefully observing how prices react to 1.2350.
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