BUZZ-COMMENT-EU-UK frictions could trigger the next pound drop

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November 8 (Reuters)As the negotiations between the European Union and the United Kingdom are approaching end of Game, both sides play hard bullet, which could be the trigger for the next step lower in pound sterling.

EU urges UK to fully implement the Brexit deal which London negotiated and signed, while the UK refuses to do so on issues of ‘sovereignty’ surrounding border controls on certain commercial goods.

Irish Foreign Minister on Sunday Simon Coveney said “All the evidence now suggests that the UK government is laying the groundwork to trigger Article 16, and of course that is a concern.”

There is every chance that the trigger emergency measures could result in tariffs, which would hit Brittany the economy and the pound sterling, because the EU is their biggest market.

As negotiations progress, Prime Minister Boris Johnson’s notes are at all times based on allegations of corruption within its Party , which is likely to undermine the EU’s confidence in the UK government.

Technically 5, 10 and 21 daily moving averages are declining, while 21 days Bollinger bands are expanding, which is a downtrend setup.

Zone 1.3412-19, September low and 38.2% of the increase from May 2020 to June 2021, provided a basis on Friday. A breakout of 1.3400 would open the door to a test of 1.3162-66, 50% of that move and 38.2% of the overall 2020-2021 rise.

A fence above the 1.3682 21 DMA is required to end the bearish bias.

Associated comment. For more click on FXBUZ

November 8 data https://tmsnrt.rs/3kasTcP

(Andrew Spencer is a market analyst at Reuters. The opinions expressed are his own. Edited by Sonali Desai)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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