March 29th 2019 at 11:00 pm, is the moment the UK will drop out of the European Union. 2 years to the day after the UK triggered Article 50 and has been enshrined in law within the EU Withdrawal Act 2018.

Since the original vote back on the 23rd June 2016, it has been a fairly rocky road for negotiations, and as always inevitable, time is running out to get arrangements in place. So what are traders looking to at currently? The most important date in the diary is the 17th and 18th October when the actual EU Summit will take place. On the 17th , a working dinner between the bloc leaders is planned to discuss the latest developments in the UK's withdrawal from the European Union. Talks will centre on how negotiations have progressed and whether there is a need to call an extraordinary summit in November to finalise a deal and settle divorce talks. November seems the most likely date that a working deal could be agreed on. The Northern Ireland border seems to be one of the most contentious issues with both parties expressing very different solutions. There was an agreement prior between the UK and the EU on a backstop, which would align both Ireland and Northern Ireland, should a deal not materialise. The backstop was shot down by the DUP as they do not want to be treated any differently than the rest of the United Kingdom. If talks have not progressed as hoped, a no deal is a likely scenario and all parties will begin to prepare for that eventuality. Expect large bouts of volatility and endless news reports detailing what may be affected by a no deal.

There is a European Council meeting due to take place in December and this again may be seen as an opportunity to put together a deal. Following a possible agreement, the House of Commons must vote before any deal is put into law. All EU members will get a chance to vote on the terms of the withdrawal, which again may provide further obstacles. Trade talks can then begin to take place during the 21 month transition period which would follow if a deal is agreed. The UK’s membership will remain the same but they would not have the opportunity to vote.

Sterling Update: Last week’s lows looked threatening to the current bullish trend channel which is showing signs of a potential fight back against the dollar. The start of the week (8th October) has seen a slight Dollar strength as we were unable to hold above the Friday high. A move above Friday’s high would be a break of a downward sloping trend channel and possibly set us up to resume the upward moves we saw a few weeks back.  1.33 capped the recent highs back on the 20th September, this sits just below the 38.2% fib which is not far from the medium-upper trend line resistance.  To the downside, 1.29 has supported the market since we had a strong positive trading day back on 10th September, breaks below here may put jitters into the market.

GBPUSD Daily Chart – Some green shoots in the Market but fundamental events weighing heavily

GBPUSD Daily Brexit Post 3