Brexit will occur until 31 December 2019? What’s next?

By 16/12/2019News
Morning Stock News

Gold   1476,60
(+0,05%)

EURUSD   1,1135
(+0,17%)

DJIA   28183,50
(+0,12%)

OIL.WTI  59,79
(+0,15%)

DAX   13307,68
(+ 0,01%)

As we noted in last week’s newsletter, the main driving idea for the pound sterling was the parliamentary elections. On the night of Thursday to Friday, the results were announced. Despite the skepticism of the analysts, the conservatives, led by Boris Johnson, won the majority in the parliament. This means that they will be able to form a government on their own, without joining coalitions with other parties.

GBP/USD Day Chart

trading-chart-16.12.2019

This is the biggest success of Tories of the last 30 years. And this party now says with certainty that the parliamentary majority will vote for the UK’s exit from the EU.
Is it over? No! Actually, it’s just getting started! Yes, the British people are fed up with the uncertainty. However, the coming certainty hides a lot of problems, which are not yet clear how to solve.
First of all, we are talking about visa policy with regard to EU citizens and trade agreements. Potentially, next year we may face a sharp drop in production in the UK and a decline in GDP by 2-3%. Of course, this will be a huge shock to the economy. Everything has to be paid for. And it will be a payment for the country’s ability to make independent decisions, without regard to other EU countries.

EUR/USD

Very interesting Friday was for Euro/Dollar. In the morning, the pair finally broke through the 200-day simple moving average line from bottom to top. However, as the day before, the euro turned down and closed the week below this critical resistance.
If we look at the situation in the H1 timeframe, we can see that the positive news, and then the negative one is almost identical to the movement of the pound sterling against the U.S. dollar.

GOLD

Despite a lot of positive developments, both from the side of elections in Great Britain and from the side of negotiations between China and the USA, gold grew on Friday’s trading. The dynamics is sharply opposite to what we saw in the positive news over the last 2 months. Perhaps the gold metal has already fallen off and there is no one to sell it even on such a negative background for gold news.

What awaits us today?

03.00 Industrial production in China in November
09.30 Composite Business Activity Index in Germany for December
10.00 Composite Business Activity Index in the EU for December
10.30 UK Services Business Activity Index December
15.45 U.S. Manufacturing PMI Index for December


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