Subtle shifts in the rhetoric give GBP buyers hope
Sometimes in situations like this, small things that might not be much on their own, can come together to form something bigger and that can just shift the balance of views on a subject. In the case of Brexit, this seems to be happening now.
Amidst the mess May finds herself in, there’s reasons to think a no-deal situation is lessening and by proxy, that means something better. The meaningful vote is not becoming the end of the world scenario it’s been looking like. There’s growing noises that some MP’s might be getting cold feet on voting against the deal (we’ve already had one public reversal from MP George Freeman), and that May might not lose by as much as people expect, which in the whacky world of politics is sometimes as a good as a win.
We’re also getting noises from the EU that they may help grease May’s case for assurances, and May in turn is said to be trying to grease the Irish lot. These subtle shifts do not change the overall picture of Brexit (it’s still a massive shit show) but for us traders, it can be more than enough to change sentiment in GBP, even temporarily.
This isn’t a post saying steam into GBP longs, as we know we could get a headline that sees us trading under 1.27 in a blink. It’s more to say that we’re keeping a finger on the pulse of Brexit and the market sentiment, and we can spot when that pulse changes. As I say, it may be very subtle but that sublety can mean GBP finds itself a dip buyer rather than a rally seller, and can find a different range than the one we’ve been in these past few days.
I’m still not keen to trade GBP to any great degree given the headline risks, and opportunities like fading the Evening Standard story are blue moon opportunities but that doesn’t mean I’m not watching carefully for any shifts in sentiment and standing ready to pounce. Caution is still very much needed in this currency.