15.10.201910:32 Forex Analysis & Reviews: Welcome to the heights: the pound perked up

Good political news has taken British currency to unprecedented heights. The pound has soared to new price peaks and is not going to give up. The market is closely monitoring the unpredictable sterling, not daring to predict its dynamics.

The British currency reacted with strong growth to the positive news about the negotiations of Boris Johnson, the British Prime Minister, with the representative of Ireland. This meeting was productive for both parties, which the pound did not fail to take advantage of. At the moment, no specific agreements have yet been reached, but the "British" is not embarrassed. It enjoys growth, although experts admit that next Thursday, October 17, euphoria can be replaced by depression. Everything will depend on the outcome of further negotiations, analysts emphasize.

It can be recalled that last Friday in Brussels, their readiness to continue negotiations on the conditions of Brexit was announced. The next date was chosen where the new terms of the transaction should be considered - October 17. This week, the attention of market participants is focused to the summit of EU leaders, which is scheduled for October 17-18. The positive outcome of the next negotiations will give the pound a chance to rise, however, the conclusion of the transaction may send the pound to around 1.3000, experts emphasize. Currently, the GBP / USD pair is trading in the range 1.2644–1.2645.

The morning for the British currency began at 1.2616. Then, in a short time, sterling rushed up, and the GBP / USD pair reached the level of 1.2668–1.2669. According to experts, now is the most suitable conditions for the growth of the "British". On the weekly chart, the pound formed a double bottom, and then also formed the "third wave" upward pattern. The start of trading demonstrated the strength of buyers of the British currency, experts say.

The favorite of this week was the topic related to Brexit and measures to support the European economy. In this regard, the pound was in the spotlight, and its sharp reaction to any nuances of negotiations is a natural phenomenon. If there is no positive news after the summit, then investors can panic and bring down sterling. Once again, they will prefer protective assets: time-tested gold or Japanese currency. In the case of the implementation of such a scenario, the European currency will also be difficult: it is expected to continue the downward trend, analysts are sure. In addition, they argue that even an orderly UK exit from the EU will not do without negative consequences for both the country's economy and its currency.

Thus, experts recommend buying the pound until Thursday when new information on the deal appears. The further situation will depend on the outcome of the next negotiations, experts sum up.