Brexit and the EURGBP

The divorcing couple currency pair, the EURGBP, is oscillating between .90 and .87 and has been since the middle of September of 2017. It is falling in the short term and today’s signals hold a sell indication. The question is where it is going in the longer term. We think that it will continue its weakness. Remember, following the vote in June 2016 to leave the EU the GBP has weakened by over 20%. Using the Fibonacci retracement indicator, we can see that the oscillating price mentioned above and so if EURGBP breaks above the .90 level it will move on to higher levels, meaning the GBP is weakening against its EUR cohort. Fundamental signs of this weakness will be deterioration in the Brexit talks as well as weakness in economic performance within the British economy, as seen by today’s decline in the December Construction PMI report.

Volkswagen shaking off its long declines form the 2015 diesel engine testing scandal where the US government fined the Wolfsburg Germany engine and vehicle manufacturer for willfully rigging its emissions data in each diesel vehicle sold in America. The Federal Trade Commission slapped a fine of 16 billion dollars and a mandatory retrofit of all vehicles sold with the bogus software AND convicted the US Chief and sent him to prison for seven years. This monkey business had a sever effect on the stock price. Well, sales have been strong in 2017 and the stock price is reflecting that.  Currently having retraced 50% of the huge decline (58% at the time of the decline) it is making strong efforts to break upwards and return to its former glory.  Look for price to break above 175 per share. Should it do so, it will likely continue to the 200 zone. Onwards and upwards. Excelsior.