GBPUSD has remained on a ranging market since Monday with more downward pressure coming in, up to the present moment. The pair failed to rise with other pairs yesterday when there was a strong US dollar pullback. The bulls are fearful over the outcome of the increasing tension on Brexit after the Labour Party leader of Northern Ireland disclosed what he called the “five strategies for Brexit to work.”
The UK Brexit Minister, Lord David Frost, announced that the UK and EU will intensely discuss implementing the Northern Ireland protocol this week.
Currently, the significant resistance for GBPUSD is at $1.2150. Failure to sustain above the current range will push the price down to the next support at $1.2092.
How is the Brexit tension affecting the British Pounds today?
The increasing tension over Brexit is currently weighing on the British Pounds negatively. Thus, investors are now staying away from investment and awaiting the resolution of the current crisis. The tension heightened after the Northern Ireland government accused Britain of bridging the Brexit deal agreements on the Northern Ireland protocol. This accusation comes in following the new laws formulated by the British Parliament, which had altered the initial understanding of the Brexit deals.
According to the response from the British Parliament, it was necessary to prevent goods from flowing into EU member country Ireland from the British Province of Northern Ireland.
This bridge on the initial Brexit deals has further increased the political tensions between the EU and Northern Ireland.
Nevertheless, the current Brexit struggle is seriously affecting the economic activities in the country. For instance, according to the report from Reuters, “Farmers are continuing to suffer from labour shortages and wasted crops as seasonal workers struggle to get work with the new Brexit Visa.”
This shortage of workers, according to the report, “has led to millions of pounds being lost as crops remain unpicked, in turn increasing food inflation up to 20 percent…”
The issuance of post-Brexit visas was impacting farm activities and the invasion of Ukraine, which has prevented more hired workers from coming to work in the UK.
Speaking on this, the Managing Director of Sandfield Farms told sky news that his company is facing a significant shortage of workers due to the current situation. In his words: “If we haven’t got the people, we simply can’t harvest the crop.”
“We try to recruit locally, and they’re just not the people out there.”
Above all, the general sentiment for this forex pair is bearish.
