The March British pound was a big mover in the currency space this week. It currently sits at +220 pts since the start of January, and showing some good bottoming action on the charts. Plenty of news surrounding a Brexit deal this week, with the proposed plan being rejected by an extreme margin in British Parliament, prompting a non-confidence vote against May. She did in fact survive the “no confidence” vote, which would’ve have prompted a general election and caused even more uncertainty and disfunction within the British Government. Despite the drama within British Parliament, it does in fact appear that the majority are in favor of striking a deal ahead of the March deadline. This is likely what spurred a rally this week in the British Pound. The British pound has been largely held underwater for the past 2 years from what seems to be a never ending drama story surrounding Great Britain’s exit from the EU. With Brexit in the rear-view mirror no later than February, coupled with our “bearish” outlook on the USD, we believe all can breath a sigh of relief and give way to a stronger British Pound in coming months. Upside target in the near-term is 1.3300 with longer-term to 1.3800.
British Pound Weekly Chart