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GBP/USD Trading - Renewed Brexit talks - 09 Jan 2017

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GBP/USD Trading - Renewed Brexit talks - 09 Jan 2017
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GBPUSD down 0.87% on the day on PM May’s comments

Brexit was back in focus on the second trading week of the year as GBPUSD is currently seen trading 0.87% lower on the day, extending the declines from last Friday. The U.S dollar remained strong after Friday's payrolls report showed a strong uptick in average hourly earnings.

Wages increased 0.40% on a monthly basis, pushing the yearly wage growth to 2.9%, the highest since 2009. The GBP on the other hand remained weak as investors were bearish on the currency.

Over the weekend, the UK's prime minister, Theresa May told in a televised interview that she was committed to leading the UK from the European Union following last year's referendum results. The GBP fell on her comments on Monday's open, although the UK government is yet to receive a verdict from the nation's Supreme Court.

The Supreme Court is expected to deliver its judgment this month on whether the UK government must require a parliamentary approval or not in order to trigger the Article 50 to formally begin the Brexit process.

Although GBPUSD showed signs of life last week, the NFP report put a lid on the gains as the cable fell from Thursday's bullish close at 1.2414 to gap down on today's open at 1.2249. The economic calendar is quiet today with not many releases of importance, either from the UK or the U.S.

Only the Labor Market Conditions and Consumer credit data are coming out later this evening but unlikely to move the sentiment much.

How to trade binary

On the 4-hour chart, GBPUSD is seen trading within a falling price channel after breaking the resistance at 1.2242. The breakout comes after the broadening funnel pattern was broken. Expect short term reversal back to 1.2242 where resistance can be established, making it an ideal price level to purchase daily PUTs for an end of day expiry at 21:00 GMT.

Asset: GBP/USD
Direction: Put
Target price: 1.2242
Expiry: 21:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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