At the end of the European trading session on Thursday, the GBP/AUD pair continued to point downwards after breaking a support line formed by a steep uptrend that started on October 10.
However, judging by the larger D1 timeframe, we can see that the pair still moves in a long-term uptrend. Thus, the current decline might be part of a temporary correction but it all depends on how the Brexit saga ends.
Currently, the pair is trading at 1.88 as of 4:26 AM UTC, losing 0.38% so far.
UK PM Boris Johnson Agrees with EU Over Brexit
Yesterday started the European leaders’ two-day summit in Brussels, and Prime Minister Boris Johnson secured the leaders’ approval for a no-delay Brexit. The EU gave its unanimous support to the deal, putting all responsibility on Johnson to fight for it in the British parliament.
The two sides reached the agreement after several days of late-night negotiations and about three years of confusion.
Johnson said during a speech:
“Now is the moment for us to get Brexit done and then together to work on building our future partnership, which I think can be incredibly positive both for the UK and for the EU.”
“I hope very much … that my fellow MPs in Westminster do now come together to get Brexit done, to get this excellent deal over the line and to deliver Brexit without any more delay,” he added.
But Here’s the Thing…
The GBP/AUD initially rose on the positive news about the UK-EU agreement, increasing from 1.872 to 1.888. However, Johnson has to secure the approval at home, and the biggest challenge is to convince the Democratic Unionist Party (DUP), which represents Northern Ireland.
However, the DUP said that it wouldn’t support the proposed agreement. This was adding to concerns that the deal might not be passed by the Parliament on Saturday. The GBP/AUD reversed its stance after the news and currently moving downwards.
“You certainly can paint scenarios, globally and then in the UK, where that may not be enough. And certainly you can paint scenarios where you want to do some of that, but you absolutely want to complement it by fiscal policy.”