The British parliament is moving forward with processing Article 50. What does it mean for sterling? Here is their view, courtesy of eFXnews: A positioning squeeze coupled with a broader dollar sell-off has made holding sterling shorts painful this year. We’re unconvinced the rally is sustainable. Article 50 negotiations should start badly. The likely date for talks to begin is the 9th March. A key stabilizer for the pound would be early clarity on a transitional arrangement between the UK and EU. This seems unlikely. Along with the UK, France and Italy are among only five countries where pessimism outweighs optimism about the EU according to polls and eurosceptic parties lead polls in both (figure 1). Spring elections in the former and likely summer elections in the latter means there remains a strong moral hazard incentive for a tough EU stance. Even assuming political goodwill, the sequencing is wrong. A transitional arrangement can only be agreed once the future relationship is clarified, i.e. towards the end of the Brexit process, too late for many firms. For lots more FX trades from major banks, sign up to eFXplus By signing up to eFXplus via the link above, you are directly supporting Forex Crunch. Second, there are no fallback options for hard Brexit. Negotiating multiple free trade deals in parallel with EU talks over a two year time frame is neither realistic nor good policy. We are particularly pessimistic about the prospects of a US trade deal, as outlined in our recent special report. To agree a deal with the US, the UK would have to erect non-tariff barriers with the EU and tear up much of the county’s regulatory architecture. The benefits of a US free trade deal would also be more than offset by any Trump border tax. The UK would be the worst affected by a border tax, with exports falling 35% to the US, according to our colleagues (figure 2). The WTO fall-back option is not straightforward either In sum, while volatility will remain elevated, we remain comfortable with our existing short GBP/CHF view from January and look to target either 1.10 in GBP/USD or close to parity in EUR/GBP at some point this year. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Opinions share Read Next AUD/USD: Upside Moves Unlikely To Be Sustained; Narrow Range Yohay Elam 6 years The British parliament is moving forward with processing Article 50. What does it mean for sterling? Here is their view, courtesy of eFXnews: A positioning squeeze coupled with a broader dollar sell-off has made holding sterling shorts painful this year. We're unconvinced the rally is sustainable. Article 50 negotiations should start badly. The likely date for talks to begin is the 9th March. A key stabilizer for the pound would be early clarity on a transitional arrangement between the UK and EU. This seems unlikely. Along with the UK, France and Italy are among only five countries where pessimism outweighs… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.