Bolstered By Brexit Buoyancy

Sterling has gone bid at the start to the week, on the back of Brexit dynamics outlined before. After a phone call on Sunday, UK PM Johnson & European Commission Pres von der Leyen instructed their negotiating teams to continue talks beyond the previously agreed deadline.

• Cable last seen +102 pips at $1.3326, off intraday peak at $1.3384. A break above Dec 10 high of $1.3412 would turn focus to Dec 9 high of $1.3478. On the downside, a dip through Dec 11 low of $1.3135 would open up Nov 12 low of $1.3106.
• Worth adding that cable operates just shy of a long-term descending trendline resistance, drawn off the 2007 high. It intersects at $1.3372.
• EUR/GBP gapped lower at the re-open and last trades -54 pips at GBP0.9104, after moving away from session low of GBP0.9060. A slide through Dec 10 low of GBP0.9008 would expose Dec 9/4 lows of GBP0.8984/83. Conversely, a jump above Dec 11 high/upper 2.0% 10-DMA envelope at GBP0.9230/45 would turn focus to Sep 14 high of GBP0.9292.
• EU Chief Brexit Negotiator Barnier will brief EU Ambassadors on "the state of play of EU-UK negotiations" this morning. Elsewhere, focus in the UK falls on Tuesday's labour mkt report, Wednesday's inflation data, Thursday's BoE MonPol decision & Friday's retail sales.