GBP / USD – Pound celebrates Juncker's optimism about Brexit and jumps to 2-month highs

NEWS AND QUOTE Sterling:

• The president of the European Commission, Jean-Claude Juncker, is optimistic about the Brexit process and says that it is possible to reach an exit agreement by October 31.
• The pound receives Juncker's comments with enthusiasm and shoots upwards.
• In any case, it is necessary to maintain caution, since optimism could last a short time.

Learn, in a simple way and in clear terms, how forex trading works and how to bet on the direction of the pound sterling. Download here our introductory guide to the forex market and gain confidence in the operation.

The British pound registered strong gains on Thursday and was strongly appreciated against its main counterparts, after the president of the European Commission, Jean-Claude Juncker, offered positive comments on Brexit in an interview with SkyNews. (At the close of the New York trading session, GBP / USD rose 0.4% to 1.2524).

In his speech, Juncker said that it is possible to reach a Brexit agreement by October 31 and that he is prepared to leave the clause of the “Irish safeguard” if it is replaced by an alternative plan that meets all the objectives of the treaty of withdrawal.

At first glance, these observations offer hope for the process of separation of the United Kingdom from the European Union, but it is important to remain cautious, since in two years of negotiations there has been no viable alternative to replace the safeguard.

At the moment, although Boris Johnson seeks to remove London from the community block on October 31, whatever happens, with or without agreement, the most likely scenario remains that of a new extension to Brexit, considering that the British Parliament has blocked the strategy of a messy exit.

All this sets the stage for new episodes of volatility in the coming months, but at the same time it provides space for the British pound to maintain a positive tone, both against the US dollar and against the euro.

Request here the Sterling Pound Trading Guide corresponding to the third quarter of 2019 and discover what the future has prepared for the British currency.

GBP / USD TECHNICAL ANALYSIS

In the last trading sessions, GBP / USD has exceeded its 100-day moving average decisively – a sign that buyers would be returning to the market. If the increases continue in the short term, it is possible that the pair will test the resistance at 1.2580 (maximum of July 15). A break of this level would activate a strong bullish whip, facilitating the recovery of 1.2671, where the Fibonacci retracement of the fall from March to September converges and a medium-term trend line (yellow line).

In the case of a pull-back, the first support of relevance is found in 1.2425. A perforation of this support area would put into play 1.2331 (Fibonacci retracement of 38.2% of this month's progress).

GBP / USD TECHNICAL GRAPH

TRAINING TOOLS FOR TRADERS

— Written by Diego Colman, Market Analyst for DailyFX in Spanish.

Follow me on twitter: @DColmanFX