empty
 
 
25.11.2020 12:34 PM
GBP/USD analysis on November 25. The subject of lengthy negotiations between the European Union and the UK is the trade turnover of almost $ 900 billion

This image is no longer relevant

In the most global terms, the construction of the upward trend section continues but the wave marking takes a complex form and may become even more complicated. The section of the trend that started on September 23 took a five-wave form but not an impulse one. A successful attempt to break the previous peak indicates that the markets are ready for further purchases of the British pound. The supposed e-wave also took a five-wave form.

This image is no longer relevant

The lower chart clearly shows the a-b-c-d-e waves of the uptrend section. The assumed e-wave took a more complex five-wave form. However, even with this complication, it is nearing completion. At the same time, the demand for the British remains quite high. This means that the upward section of the trend can be complicated almost indefinitely. I am still inclined to the option of a fall in the instrument's quotes.

Trade negotiations between the EU and the UK are continuing and that says it all. I have repeatedly said that there has been no important news on this topic for the past weeks. All other messages that come to the market do not deserve special attention at all. Today I propose to find out why a trade deal is so important for both the EU and Britain. The answer is really simple and short: $ 900 billion in trade. At this time, Britain and the EU continue to trade without any duties, so the trade turnover has not been affected. However, it will suffer very much from January 1, 2021 if London and Brussels will fail to conclude an agreement. By comparison, the UK signed a $ 1.5 billion free trade agreement with Japan and $ 27 billion with Canada in 2020. The agreement with the EU is worth 900 billion and that is what's at stake. This is understood by almost everyone and this agreement is more important for Britain than for the European Union.

The UK business sector is calling on Boris Johnson to conclude an agreement with the EU, saying that business is depleted by the coronavirus pandemic. Without a deal, most of the business will be forced to reduce its production and for some it will be a critical moment and will have to close. Therefore, the prospects for the British economy are absolutely black now. The end of the transition period is just over a month away. And the parties still need to ratify the agreement in Parliaments. In General, everything is going so far to the fact that the parties simply do not have enough time.

Today, America will release important reports on GDP, orders for durable goods, as well as on personal income and expenses. I'm suggesting paying attention to these figures because they can trigger a market reaction if the actual values do not match expectations.

General conclusions and recommendations:

The Pound-Dollar instrument has resumed building an uptrend but its last wave is nearing completion. Thus, now I recommend that you look closely at the sales of the instrument but the British is not yet giving clear signals about the end of the upward section of the trend. At the same time, purchases of the instrument are now quite dangerous, given the uncertainty associated with the trade deal.

Chin Zhao,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback