News & Analysis

Brexit draft agreement reached, what’s next for the GBP?

Nov 15, 2018 | Forex News

Upcoming high impact news:


A Brexit daft agreement has been reached between the EU and Britain. The EU’s chief Brexit negotiator Michel Barnier says “decisive” progress has been made in reaching a final agreement on the UK’s departure from the European Union. The 585-page draft withdrawal agreement is seen as a crucial step in completing negotiations. The Irish border which has been one of the sticking points looks like avoiding a hard border. The deal still needs to get through the British parliament but has passed Theresa May’s cabinet.

The draft withdrawal agreement covers so-called “divorce” issues as the UK prepares to leave the EU in March 2019. It includes a “financial settlement” from the UK, thought to be about £39bn (€45bn; $50bn). Speaking at a press briefing in Brussels, Mr Barnier addressed one of the major concerns of the divorce, the Irish “hard border” issue. He said to avoid the need for physical checks on goods or infrastructure at the border between Northern Ireland and the Republic of Ireland, the EU would work with the UK to agree a trade deal. However, if talks fail, the so-called “backstop” measure would be used. – BBC

A transition period which was previously set at 21 months may be extended by mutual agreement. My Brainer did comment that any extension would by a one-off, “by a limited period and by joint agreement”. He said the draft deal delivers “legal certainty” on the consequences of the UK’s divorce from the European Union. There are also special protocols in place for Gibraltar and Cyprus to enable people there “to continue to live as they do today”, he added. Mr Barnier made the point that while this agreement represented progress, there was “still work to be done”. – BBC

October set up good rallies from lows after Brexit developments. The GBP to the USD and JPY have been held by overall highs and ranges. After a three day decent this month price has rallied as news filtered through that progress was being made. Yesterday’s trade was volatile with price closing flat after strong moves higher and lower. Today price has been more subdued then expected after the draft agreement passed cabinet. The GBPUSD has added 20 pips but the GBPJPY remains fault. Traders might be waiting for how things go in parliament and if it can be passed by the November 21st.

GBPUSD remains in multiple ranges with the newest setting up in yesterday’s session. With a higher low bullish bias looks to have a favor for now. 

GBPJPY remains rangebound on the short-term. Key resistance remains at 149.30. A lower high has formed from 146.15 buyers have started to lift price moving towards the European session open but resistance remains on the short-term from 148.43 – 148.75.

Good Trading from Eightcap

Sources; The BBC  – All times are AEDT

* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.

In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.







Level 6, 360 Collins Street
Melbourne, VIC
3000 Australia

Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.