Welcome to another AspireFX blog, today we will be looking at EURGBP and what the most recent post-Brexit news could mean for this pair.
A key request from the UK side since leaving the European Union on 31 January 2020 has been how access to fishing waters gets divided between the two blocs. In the early stages of negotiations, the EU were insistent that EU boats receive the same access to UK waters as before but the latest news reports are saying that they are willing to be creative with how the waters are divided, providing a more optimistic outlook for the pound.
Looking at the 4 hour time frame we have a head and shoulder pattern that has already played out and now we can look at a possible retest of the neck line shown by the highlighted box. This will also coincide with a 3rd touch of the descending trend line.
On the 1 hour time frame, we can see that the highlighted area lines up nicely with 61.8 Fibonacci retracement level. However, if we break through that level and close above the descending trend line, further upside movement can be expected.
It will be important to see if any formal agreements are made between the UK and EU regarding access to fishing waters when looking at this pair. It’s crucial to understand that due to climate change, the majority of fish have moved up to British waters so for the UK to get a deal where they are more in control of their waters will be a huge plus for their economy. Remember to stick to your trading plan and for the safest entries, always wait for candlestick confirmation before executing a trade. Hit the follow button below to receive blog notifications sent directly to your email.