Look GBP/USD for New Opportunities

Sterling dips mildly as new development puts the prospect of no-deal Brexit back on table. The newly elected House of Commons will likely have its first vote on the Brexit Withdrawal Agreement on Friday, which will likely be passed with the Conservative’s majority.

However, it’s reported that Boris Johnson will attempt to include text in the legislation that prevents the government from extending the transition period, beyond end of 2020. The move is believed to be based on the Conservative’s manifesto of not extending the implementation first. However, that would also give UK and EU only 11 months to complete the negotiation of a trade agreement, something which usually takes years.

Without further escalation, the market could buy the dips initially, considering this headline off to political posturing as PM Johnson is trying to sweeten the deal with the EU.

GBP/USD bulls can be looking for dips to 1.3200 to buy. Specially, we believe that the 1.30 region underneath should continue to be a bit of a “floor” in this market, as it is the top of the last bullish flag. If the H4 candle close above 1.32 we buying with the nearest target at 1.3422 before to see eventual retesting of 1.3515. The Stop Loss should be putted under 1.30.

What do you think?