October 26-30. Britain and the pound sterling face tough times

2020-10-25

The fundamental background of the GBPUSD pair in the coming week will be determined by the following factors: Brexit, negotiations on a trade deal, elections in the US. And during the last trading week, there was no news on any of these topics. Thus, the strengthening of the British currency can even be associated with the absence of negative from the UK, but the overall fundamental background in England remains extremely difficult. In fact, Brussels and London can announce the final completion of negotiations on a trade deal at any time due to the impossibility of reaching an agreement. And although it can be assumed that negotiations in one format or another will continue until the parties come to an agreement, it just might take much longer, as long as we are talking about an agreement until December 31. And until December 31, the parties will not have time to sign the deal. This was clear back in March. Thus, sooner or later, the British currency will collapse again. So far, it is partly kept afloat due to the unstable political situation in the United States, as well as due to the complete uncertainty of the future in this country. However, after the elections (I want to believe that they will not drag on for long weeks and months), the situation should become easier and simpler, which will relieve tension from the dollar bulls. Moreover, there is a whole list of reasons why the pound sterling has nothing to count on next year. Thus, the pound is likely to maintain a long-term downtrend, which began back in 2007 and resumed in 2014.