Jump to content
  • 0

Brexit could sent the GBP down 900 PIPS!


Guest ben_wilson-powell

Question

Guest ben_wilson-powell

Just wanting thoughts on this gesture I've been advised of... based on an article... https://www.poundsterlinglive.com/gbp-live-today

"Please check the chart below, as you can see when the UK decided to leave the EU the GBPJPY dropped over 3000 PIPS! The market has now pushed up to an area just lower than the referendum. This means if the UK parliament does not back Theresa May’s deal, which is highly likely. The GBPJPY could drop to post referendum levels, or even lower!" 

GBP.png

Link to comment

2 answers to this question

Recommended Posts

  • 0

Hi @ben_wilson-powell,  I've written before that just such a scenario is very possible, the rationale being that the GBP low post referendum was calculated in advance by large speculators who were assuming Brexit meant Brexit and the rallies off the lows were a response to the idea of a negotiated separation. The realisation of a no-deal Brexit could mean a return to the original supposition though much has occurred since the referendum such as the idea that WTO trade rules could be applied that may lessen the impact of a no-deal Brexit decision.

Link to comment
  • 0

The danger of looking at charts @ben_wilson-powell is looking only at a segment that fits ones bias.  Now look at the long term charts (see 2 X monthly versions below).  What you will see clearly (to me at least) is that GBP has been in a Bear market for decades (you will see similar on GBPUSD).  Mind you almost every currency has this profile against the Yen, a well documented economic challenge for Japan that led to Abeonomics (which is mostly just the same thing that all the central bankers are doing).

There may very well be further drops (GBPJPY), whether triggered by Brexit noise or not.  However the underlying issue for the UK economic is poor trade balance, and has been for decades.  It is this very issue that pro Brexiters seek to address by leaving the EU and making non protectionist trade deals with the rest of the world (i.e. free trade deals), in particular leveraging historic common-wealth relationships (a unique position for the UK under exploited as a result of being in the EU).  I am fairly convinced that the Brexiters will not go for the Checkers deal and that will be the end of May.  Such a situation (in particular the idea that Corbyn might actually become PW - an out and out non establishment hard core socialist!) would certainly lead to volatility in both the GBP and EUR (I expect it will all turn out worse for the EU so I'm tipping EURGBP to plummet in due course).

In terms of GBPUSD (see other thread) the USD will rally hard on any sign of a stocks (well economic really) meltdown but that will impact every pair and has nothing to do with Brexit.

In terms of GBPJPY (and also checkout USDJPY charts). I think the Yen strength has bottomed out and, perhaps after a little further retracement volatility, will begin to soften and then Abe will get what he wanted, a devalued Yen, again nothing to do with Brexit.

Everyone seems obsessed with this Brexit topic and I am sure it will produce some short term volatility but it will soon be overtaken as an issue by much bigger global macro economic factors.  It is a much bigger issue for the EU than the UK, which you would find it hard to credit given the MSM coverage.  A no deal for the EU would be catastrophic.  It would embolden struggling countries like Greece and Italy to front up to Brussels because they will be seen as weak, because they are.  Those indiviudal countries issues have not been addressed and neither have the EU banks addressed the credit crunch fiasco, so that is all to come.  Add to that a Trump hardball trade war and Boom!  There goes the Euro...  The UK will be very happy in hindsight to never have joined the Euro and to be out of the EU.

GBPJPY-2-months_301118.thumb.png.9be02f50d87e011f4f366242805ac516.pngGBPJPY-Monthly_301118.thumb.png.6b38f367ff8841ad62ada23da7f906ed.png

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      22,988
    • Total Posts
      95,311
    • Total Members
      43,597
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Ouaidou
    Joined 23/09/23 13:36
  • Posts

    • Just now, according to Glassnode data, the number of addresses holding more than 100 BTC has reached a four-month low, currently standing at 15,955.
    • Bitcoin and other major crypto experienced a dip in value on Thursday, erasing gains made earlier in the week. The decline came after the Federal Reserve signaled that interest rates would remain high for an extended period, with Bitcoin retreating 2.3% to $26.5K. Despite the bearish pressure,  the founder and CEO of Bitcoin joint mining company Xive,  Didar stated that the stagnant rate increase is positive for Bitcoin. He suggested that this could reduce the attractiveness of mainstream financial assets to institutional investors in the long term, potentially driving a new rally in Bitcoin's price. Major altcoins and exchange tokens also struggled on Thursday, with ETH changing hands at $1,585, down about 2.6% from Wednesday. Other altcoins such as BNB and BGB also experienced losses. Despite these challenges, some analysts believe that Bitcoin is likely to remain within its recent range between $25,000 and $30,000. Riyad from digital asset data platform Kaiko, noted that the market needs a catalyst to mount any serious rally.  What are your thoughts? 
    • Traditional banking systems served as the gatekeepers of financial services for long, dictating how people access loans, save, and invest in opportunities. Typically controlled by a centralized system with a single authority such as a bank or government in total charge, this centralization is limited by high fees, restricted accessibility and slow transaction speed. Dentralized finance, DeFi, got introduced as a blockchain-based financial system that removes intermediaries or central authorities, and utilizes smart contracts instead. By eliminating intermediaries, DeFi delivers core benefits like improved accessibility into the financial system for everyone having internet connection regardless of their location. DeFi is also valued for its transparency. While traditional banking system often deny customers audits on how their assets are being managed, DeFi, through the help of blockchain allows anyone access to tracking and auditing transactions, thereby raising trust. Furthermore, DeFi also offers various financial services and products like DEX, lending and borrowing, stablecoins etc, all known to proffer varied innovative solutions, while operating 24/7 in contrast to traditional finance. DeFi isn’t flawless as issues like insecurity, lack of consumer protection etc are still prevalent; however, the growth of DeFi has been impressive; since its introduction, the total value locked in DeFi protocols has grown significantly indicating that the demand for DeFi services is fast growing. DeFi seems to be redefining financial industry by offering an alternative to traditional banking systems. With the increasing adoption, can we expect to see an overhaul in the way we access financial services?        
×
×
  • Create New...
us