GBPUSD: Brexit Uncertainty Overrides Fundamental Valuations
Fundamentals:
On Tuesday, February 21, 2017, the Prelim Business Investment q/q will come out.
Now, GBPUSD is fundamentally undervalued, after falling around 30% last year. Yeah, sure, this is a long-term fundamental valuation. There is something we need to consider. The here and now: Brexit Uncertainty Overrides long-term fundamental valuations. Brexit (Article 50).
What?! I thought Brexit happened already. No, we have to wait for the Article 50 to be nailed down in the coffin. Look to February 20th for the preliminaries for the UK, and the the House of Lords and the House of Commons must agree on the exact wording of the BIll up two weeks into March 2017. Then the Monarch will sign it and THEN it becomes, officially, a Brexit.
Uncertainty causes hesitation in businesses investment. I think this is more important that the GBP at this moment.
Technicals:
(1) Channel Basis resistance
(2) Bearish candle sticks at resistance
(3) 50% pullback
Risk:
- Second Estimate GDP q/q coming up on Tuesday, February 21, 2017. If there is some revision to the upside, then this could stop me out.
- Prelim Business Investment q/q. I think that this is more important the the GBP at the moment.
On Tuesday, February 21, 2017, the Prelim Business Investment q/q will come out.
Now, GBPUSD is fundamentally undervalued, after falling around 30% last year. Yeah, sure, this is a long-term fundamental valuation. There is something we need to consider. The here and now: Brexit Uncertainty Overrides long-term fundamental valuations. Brexit (Article 50).
What?! I thought Brexit happened already. No, we have to wait for the Article 50 to be nailed down in the coffin. Look to February 20th for the preliminaries for the UK, and the the House of Lords and the House of Commons must agree on the exact wording of the BIll up two weeks into March 2017. Then the Monarch will sign it and THEN it becomes, officially, a Brexit.
Uncertainty causes hesitation in businesses investment. I think this is more important that the GBP at this moment.
Technicals:
(1) Channel Basis resistance
(2) Bearish candle sticks at resistance
(3) 50% pullback
Risk:
- Second Estimate GDP q/q coming up on Tuesday, February 21, 2017. If there is some revision to the upside, then this could stop me out.
- Prelim Business Investment q/q. I think that this is more important the the GBP at the moment.
הערה:
I am currently out of this trade. I am watching and waiting. Read my fundamental bias above with raionale. GBP/USD is undervalued, but we can still fall more, given the sentiment. I am sitting out on this one. Other GBP pairs are being traded.
הערה:
הערה:
Monthly Bear Flag to reach the Q1 target
Capturing the swings of the stock market & currency market. It's a dirty job and equity/currency traders must do it.
