Sterling starting to look vulnerable again
Despite a pretty good Bull run so far this month Sterling (GBP) is starting to look a little uncomfortable. Bullish indicators are starting to waver and it remains to be seen whether the rally has truly run out of steam or whether we are entering a period of weak consolidation. The main obstacle for Sterling remains the uncertainty of Brexit, with the UK’s hapless Prime Minister fixated on her ‘Chequers’ plan which has the distinction of being unacceptable to just about everyone with an opinion. However leaving the EU without a deal is looking increasingly attractive to voters – they are in no mood to hand over £39bn to the EU simply in order to maintain the status quo. The current rumour that she will fly to Brussels tonight to beg for more time to agree a deal will do nothing to ease Sterling’s uncertainty, nor encourage Brussels to take her seriously. One could hardly imagine the late Margaret Thatcher undertaking such a humiliating journey. A change of leadership is somewhat overdue and the failure of Parliamentarians to seize the moment will haunt them for years to come. We’d be unwinding short-term Long positions on any rally until some clarity emerges from the gloom.