- GBP / USD saw a “sell the deal” reaction to the confirmation that a Brexit deal had been reached.
- Trading will slow in the next few hours amid the anticipated closings of the Christmas Eve market.
It recently emerged that the EU and the UK have reached a Brexit deal. Given that such a result was expected at this point and the markets had already priced it in, the GBP has seen a ‘sell it off’ reaction. As EU Commission President von der Leyen and EU Brexit negotiator Michelle Barnier hold a press conference, the GBP / USD pair has retreated from previous daily highs above the 1.3600 level. to set lows below 1.3550. The pair is currently trading at 1.3560, but it still holds gains of around 0.5% or 70 pips on the day.
Trade is likely to slow down significantly in the next few hours, as European market participants have already left for the Christmas Eve celebrations and American participants will soon follow.
GBP / USD falls below short-term uptrend
GBP / USD has fallen below a short-term uptrend that had lifted the pair from 1.3300 to 1.3600 in recent days. A potential move lower towards support around 1.3500 is in the cards, although a further sell-off seems unlikely in the context of a deal that has been officially reached, other than whether the move south is driven by the strength of the USD.
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