When discussing the impact that Brexit has on trading the Forex market, we should fully understand what the term “Brexit” means, right? Brexit is the withdrawal of the United Kingdom from the European Union; changing the relationship between the two and affecting trade, security, and migration.
But what does this mean for the Forex market and its traders? Well, after the initial shock of Brexit currency impact, the pound was further weakened due to a series of political developments and poor data releases. For the most part, the pound seemed to tumble on an initial shock, recovering only slightly, remains on the now new low, and repeats the process. This has been causing a chain reaction of trader panic and anxiety and plummeting the pound even lower and lower. We have seen some very occasional positive signs, triggering the British economy to help boost sterling recovery slightly. The market is currently in large quantities which weakened the pound because of the lack of demand amongst investors.
Once the pound reaches the investors liking, and they see levels to be profitable they typically close their short trades by rebuying it. This creates a large demand for the pound which helps it recover some of its recent losses. So, why is the pound staying low? Well, as traders we know that the unknown is a trader’s worst fear, and with uncertainty tainting Brexit, and causing investors to remain hesitant, we don’t know what will happen. It is impossible to predict exactly how, when or even if the pound will fully recover from the Brexit currency impacts, but we will have to wait and see what the future brings with caution on our minds.
Getting set up with a broker, such as The Apiary Fund is the smartest choice a trader can make for themselves because of the support, guidance, educational information, training and coaching The Apiary Fund reviews with you. I hope this helps give you guidance on how to tread safely when it comes to Brexit, but to also remain positive, because the exact future of Brexit is unknown to the Forex industry. Trading foreign currency is a blessing and as Forex traders, we need to embrace the up’s and down’s and take the guidance when we can get it.