Fx_Montana
Long

UK HAS TO GET A BREXIT DEAL - GBP BIG PROFIT UPMOVE

FX:GBPUSD   British Pound / U.S. Dollar
Heading in to the key EU October summit to be held this Wednesday where Brexit will be discussed. Lots of positive Brexit talk in the last 2 weeks with the EU saying they're prepared to offer a "supercharged Brexit deal" and that "EU are ready to offer a deal" and most recently, German companies (specifically auto sector) putting pressure on the German govt -0.08% to offer UK a good deal. Why? Because 30% of German cars are sold to the UK, with a bad Brexit deal or under WTO trading rules, tariffs would be imposed and this has negative impacts for German economy.
There will be a deal, there has to be.
For progress towards a deal, will squire a solution to the Irish border backstop and the conditions of the future trade deal, or future trading relationship between UK-EU. The hardest part of the deal is to get a majority in the UK parliament, with PM May still struggling to get DUP and Tory Brexiteers all on side, if the deal can get a majority in parliament this main headwind will be removed and for once politicians on the UK side will be moving in unison. Ie... we need to see the market fully price out the risk of a no deal Brexit, and a super hard Brexit.

However, if there is a no deal, then gbp would rapidly head lower. Could be a very noisy, volatile week with leaks and rumors coming out only to be not confirmed etc...

External risks: Situation in Italy underpinning $EURUSD if this risk begins to de-escalate could will aide the rally in gbp. Also the US midterms fast approaching on 06Nov, with CFTCfutures positioning showing $USD longs are the highest since late 2015/ early 2016... might start to see some of the longs unwind their positions heading in to mid terms which would help push up gbp.

Technically, heading in to the negotiations, $GBPUSD has been supported around 1.3050 to 1.3000 area. Great horizontal level of support, with a trend line joining the lows. Over the coming weeks, would expect gbpusd -0.64% to trade up to 3450/3500 area, taking profits along the way.
Aggressive stop loss would be just below 1.30 handle yielding 6 to 1 returns and a more conservative stop loss below the 02OCT low yielding 3 to 1 return. In Novemeber 2017 there was a rally from 1.30 to 1.35 took roughly 1 month to get there, this is similar to what im looking for
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