Positive signals for the Brexit talks. Where is the best positioning?

German Chancellor Angela Merkel has offered one of her most positive assessments of Brexit talks, saying the talks are moving in full swing and the speculation that they will collapse is totally unjustified. "Negotiations move step by step, no matter how they perform in the British media."

Merkel made his assessment on the first day of the EU summit, on which British Prime Minister Teresa May urged his colleagues to stop their silence and overcome the dead end street they are in.

The news has positively affected the GBP, and since the beginning of the interbank market today the currency has risen by 0.39% against the dollar.

Where is the pound now and how can we trade the progress of the Brexit talks?

1.GBP/USD

The currency pair is on an upward trend after correction and breakthrough on a short-term downward channel. The cost is corrected after the breakdown of the short-term downward channel, coinciding with the internal segmental line and 50SMA. Demarker also signals a new upward wave - positive for the price. A deal from current levels would be appropriate with SL at levels of 1.2918.

Alternative scenario: If the price can break the main upward trend line and stay there in several consecutive bars, the positive scenario will break and are more likely to see a decline.

2. GBP/JPY

The price generates a rather large triangle that has been activated, tested, and now the traffic gives us a technical signal for Long. When the triangle breaks, the price forms a flag-shaped formation that was pierced and tested in the previous days. The price also reaches a 38.2% correction of the latest bullish momentum, a level that supports the remaining Long criteria. An entry from the current levels would be capped at SL at around 145.99 - below 50% on Fibonacci.

Alternative scenario: If the price goes back to the triangle and stays there in several consecutive bars, the positive scenario will break and more likely to see a decline.

Jr Trader Petar Milanov

Read more:

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• EURGBP: probability for an upcoming downward impulse
• GBPUSD short term sentiment in front of important data at 11:30 (GMT+3)
• A price below 2.268 can lead to a new decline by the pound
• Pound rises after the defeat of May’s Brexit deal