Investors will be eying Boris Johnson’s potential conversation with Angela Merkel, followinga conversation with French President Emmanuel Macron over the weekend. The hope is that Boris and Angela Merkel’s conversations will yield some positive outcomes, and a breakthrough may happen, as time is most definitively running out when it comes to a Brexit deal.
Hence, this coming week is quite critical for the U.K. and the Sterling. If Jonson fails to break the Brexit negotiation deadlock, it is likely that investors will become more risk-averse. Therefore, the chances of a no-deal Brexit will rise even further. The U.K. has made it clearthat if there is no deal set out by Thursday, the U.K. will focus more on exit strategies.
What About Sterling?
The British pound has gained strength against the G-10 currencies. The GBP-USD pair has reclaimed the 1.30 mark, and it is likely that that price may continue to move higher. Similarly, the EUR/GBP pair has also come off its highs meaning the Sterling has gained more strength against the Euro. The next support for the EUR/GBP pair is at 0.8925, while the resistance is at 0.9177. As for the GBP/USD, the next resistance is at 1.33, while the support is 1.28.