Traders prepare for shock UK-EU split

September 11, 2020 10:00

Traders prepare for shock UK-EU split

Talks between UK and EU negotiators have reached rock bottom after a series of shocking events that have stunned governments and economists all over the world. Earlier in the week, the UK government prepared an Internal Market legislation that directly goes against the commitments made in the Brexit Withdrawal Agreement and the Northern Ireland protocol.

Heres what has unfolded so far:

  • The EU was given no notice of this
  • The EU has given the UK government until the end of the month to scrap this legislation or face legal action for breaking the treaty
  • UK Prime Minister Boris Johnson held a crisis meeting on Thursday in which he rebuffed the EU's request
  • Senior Cabinet Minister Michael Gove says he told Maros Sefcovic, the European Commission Vice President, that "we would not be withdrawing this legislation."

The move has sent the British pound crashing lower against all other currencies with the British pound against the US dollar falling more than 5% in just a few days. Did you know that you can speculate on the price of global currencies using Contracts for Difference (CFDs)? This allows you to potentially profit from both rising and falling markets. Get started with a free demo trading account today!

While the eighth round of talks are still underway both Michel Barnier and David Frost, the two lead negotiators for the EU and UK respectively, have expressed that a number of challenges still remain and some are still significant.

As Boris Johnson has moved up the deadline to secure a trade deal to 15 October, there is an increasing chance the UK will not reach a trade agreement with the EU by the end of year deadline when the transition period to negotiate terms ends. This means tariffs will be triggered between the European Union - the world's biggest single market - and the UK.

How to trade the GBPUSD with Admiral Markets UK Ltd

If you are feeling bullish or bearish on the price of GBPUSD or other instruments, you can speculate on its price direction using CFDs. To get started, follow these five simple steps:

  1. Log in to your existing Admiral Markets trading account, or open a live or demo trading account in just a few minutes.
  2. Click Trade on your chosen account which will direct you to the Admiral Markets MetaTrader Web Platform.
  3. Type in GBPUSD, or another instrument, at the bottom of the Market Watch search box and then drag the symbol onto the chart.
  4. Use the one-click trading feature on the chart or right-click on select Trading -> New Order.
  5. Choose your entry, stop loss and target levels and position size (volume) and then confirm the trade.

GBPUSD weekly chart

Source: Admiral Markets MetaTrader 5 Web, GBPUSD, Weekly - Data range: March 30, 2014, to September 11, 2020, performed on September 11, 2020, at 7:09 am BST. Please note: Past performance is not a reliable indicator of future results.

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