The British pound caught a bid yesterday with GBPUSD jumping back above the 1.20 mark after last week's pullback. Euphoria related to the Brexit deal, namely Northern Ireland protocol, can be named as a reason behind the move.
UK Prime Minister Sunak met with European Commission President von der Leyen yesterday and the two reached agreement on new trading arrangements for Northern Ireland. This was one of the final outstanding issues preventing Brexit from being fully complete. The outcome of talks was touted as a breakthrough with some UK politicians even saying that the final deal was reached. However, euphoria started to fade quickly as the leader of the main political party in Northern Ireland - Democratic Unionist Party (DUP) - said that he is neither positive, nor negative on the outcomes of UK-EU talks and that his party will need to take a look and analyze a new proposal. Some of DUP politicians even went on to say that the proposed agreement, now known as 'Windsor Framework', simply won't work.
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Create account Try a demo Download mobile app Download mobile appRishi Sunak is heading to Northern Ireland today to win support for the deal. Should he manage to secure backing of DUP, GBP could see another wave of buying.
Taking a look at GBPUSD chart at H4 interval, we can see that the pair is making a break above the 100-period exponential moving average today. The next few days may be crucial as previous breakouts above the aforementioned moving average turned out to be fake ones and marked new lower highs in the current downtrend structure. However, Sunak could provide a fuel for a long-lasting breakout should he manage to win backing for 'Windsor Framework' in Northern Ireland.
Source: xStation5
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