Euro, Sterling up after Brexit deal

18 Oct 2019

With a Brexit deal being agreed to yesterday, between British Prime Minster Boris Johnson and the EU, the GBP/USD pair is being traded in the 1.29 range on Friday. On Saturday, the PM must convince the UK parliament to support him and accept the agreement made. 

The Relative Strength Index (RSI) is slightly under 70, away from overbought conditions. The British Pound received boosts following a number of tweets that announced the Brexit agreement. However, tensions from Northern Ireland slowed down the increase, after Johnson accepted the deal that also affects Belfast. The Northern Irish Democratic Unionist Party (DUP) are not currently on terms with the agreed deal. 

The new deal aligns Northern Ireland to the EU single market and will also act as an entry point as a customs zone for the EU. Every 4 years, the Northern Ireland Assembly will hold a vote to decide whether or not to be part of the trading arrangements. 

Moreover, September showed flat UK retail sales. 

The EUR/USD is being traded over the 1.11 handle on Friday, following missed expectations for the Chinese GBP. On the other hand, the industrial production was positive. The agreed Brexit deal helped the euro up its pace, pushing the EUR/USD towards the 1.1140. This was the highest the pair reached since late August.