On May 15, foreign exchange analyst Gary Howes pointed out that the pound has gone through seven trading days, and British Prime Minister Teresa May decided to submit the Brexit agreement to the parliament in early June. The recent decline in the pound is expected to slow down. And even reversed. Bank of America Merrill Lynch analysts believe that if the Conservatives and Labor Party reach a Brexit solution in the next few weeks, the pound is expected to skyrocket to 1.40 against the dollar.
Mei Lan will submit the Brexit agreement to the parliament in June again. The pound's decline is expected to slow down in the near future and even reverse
On May 15, foreign exchange analyst Gary Howes pointed out that the pound has fallen for seven consecutive trading days since May 6, which is the longest down time in several months, because the market is off the European Union. The pessimism of the negotiating situation. However, there is evidence that the downside of the pound may soon fade.
He believes that the technical trend shows that the pound is expected to oversold and rebound. In addition, the fundamentals are also welcoming good news. British Prime Minister Teresa May will once again submit the Brexit agreement to the parliament for voting in early June. The Brexit agreement and the key vote, the UK's Brexit process may have a turning point, which attracted investors' attention.
From the chart, the pound against the euro has fallen to the key support area since February, it may be difficult to continue to fall, so the pound's decline may gradually fade. Since mid-February, the pound has never closed below 1.15 against the euro. Since February 22, it has never been below 1.1459, indicating that the market may have strong buying interest in the pound. Gary Howes believes that the current decline of the pound against the euro may be tested in the next few days and hours, if it can close above 1.15, then you can stand on this support area.
However, Gary Howes said that this analysis is by no means accurate. It just sends a message to the market that the recent decline of the pound against the euro may slow down and may even reverse to some extent.Although the pound will not rebound sharply in the current political environment, there may be some lateral consolidation. Therefore, there is reason to believe that investors are cautiously watching the pound and waiting for the specific development of the Brexit process.
British Prime Minister Teresa May asked Labour leader Corbin to decide whether to support a cross-party compromise agreement. Currently, she is seeking to bring the Brexit agreement back to the House of Commons and another round of voting in June. On the evening of May 14 local time, Teresa May told Corbin that the government intends to submit a revised Brexit agreement and hold a vote on June 4 or 5. The government will propose to establish close customs relations with the EU to protect workers' rights and environmental protection to meet some of the labor requirements. The British government said that if the bill is to be passed before the parliamentary vacation in July, this is "impossible."
So far, the Labor Party has been reluctant to support cross-party agreements, saying the government has not provided enough concessions. However, the British government now seems willing to set a deadline, so the market is likely to enter a wait-and-see state before voting.
It is still difficult to pass the Brexit agreement, and the pound may still be at risk.
Gary Howes believes that if the Labor Party and the Conservative Party announce an agreement before this deadline, the pound may rebound. However, whether the Brexit agreement submitted to Parliament from June 4th to 5th can be passed is the real test for the pound.
He suspects that since most members of the Labor Party and the Conservative Party hold a deep-rooted position on the issue of Brexit, even if their leaders are more inclined to reconcile, they may not get enough votes in favor of the Brexit agreement. by.
JPMorganAnalyst Paul Meggyesi said: "The market generally holds the view that most British lawmakers do not support unofficial Brexit, and investors feel comfortable with it. However, we believe that if Future events will push the Conservatives to a tougher stance, and investors may need to revisit this assumption and reassess the possibility of the pound facing a tail risk."
(Article source: Huitong.com)