11:17, 27 June

Daily Analysis

Consolidates around Key 1.27 Level as Boris Johnson Hardens His Brexit Position

For the last few days the GBPUSD has eased ever so slightly away from a one month high near 1.28 but in doing so, has just returned to the key 1.27 level which has accommodated the sterling now for the last month. It did fall away down to 2019 low close to 1.25 a week or so ago however it also rallied strongly and returned to the 1.27 level just as quickly. For the last month now, the GBPUSD has been content to trade very little and consolidate right around the key 1.27 level.
Significantly through most of May, the GBPUSD fell sharply from the key level at 1.32 down to the five month low before rallying recently. It had previously done well to rally from a two month low up to the 1.32 level before sellers jumped in and turned the sterling away strongly. Earlier this year it was trading strongly above the 1.32 level and looking poised to push through 1.34 and attempt to regain a lot of los ground from previous years.

There are few signs of any support presently and even if it does rally a little, it faces possible further resistance at the 1.32 level again. In early March the GBPUSD fell sharply from an eight month high back down below the key level of 1.32 before rallying again and reaching a nine month high shortly afterwards. Late February was significant as the sterling moved so strongly breaking through the key level for the first time in many months on its way to the eight month high.

The sterling enjoyed a very positive January as it has moved from below 1.27 up to a three-month high at the resistance level around 1.32, before a subsequent decline. Starting in mid-December, the GBPUSD had slowly but steadily climbed higher from a two year low below 1.25 up to the current key level of 1.27 and beyond. As expected, it met some resistance from the 1.27 level at the end of last year as multiple attempts to push higher were thwarted.

A fresh poll has revealed that more voters want Britain to quit the European Union (EU) now than at the time of Brexit referendum.  57% supported leaving the EU in some way, three years after Brits originally voted for Brexit in 2016.  The polling comes as Boris hardened his Brexit position yesterday, vowing to leave the EU by 31st October "do or die".  At a Conservative party event, Mr Johnson said, "If you Brexit sensibly and effectively, you take away so much of the ammunition of the SNP.  Are they really going to want to join the European Union, to join the euro, to join Schengen, to submit Scotland to the full panoply of European laws? Of course they are not."  He continue with, "Get Brexit done right, and I think we can cement and intensify the union. There are things you need to do on coming out of the EU legally, to underpin the whole UK single market and we will use every opportunity to strengthen the union, not just with Scotland, but with Northern Ireland as well."