Brexit Headlines Provide Main Drive

Sterling dipped then bounced Wednesday on the back of Brexit comment, the early move lower to $1.2863 was seen on reported comments from EU officials about Brexit agreement progress, only to bounce strongly on reports that PM Johnson would await the outcome of the EU Summit (today through Friday) before deciding on the UK's next move, which took cable to $1.3064 before losing momentum. Rate eased off to $1.3007 with recovery efforts meeting resistance at $1.3034 before closing the day around $1.3011. Consolidation through Asia, support remaining at the $1.3007 level but Europe applies fresh downside pressure as market reacts late to overnight reports that PM Johnson expressed disappointment on progress, following his call with EC President von der Leyen, though he did note a desire for a deal. Cable has broken below $1.3000 to $1.2994, currently around $1.3000. EU Summit due to begin around 1400BST with Brexit the first topic on the agenda. Expect headlines from the Summit to dictate market reaction/direction. Sterling market is seen illiquid which can make for more volatile reactions. BOE Haldane due to speak at 1400BST. EU/UK Joint Committee to meet Monday. Cable support $1.2987(38.2% retrace of Wednesday's recovery $1.2863-1.3064) ahead of $1.2964(50%) and $1.2940(61.8%). Resistance $1.3064, $1.3083(Oct12 high).

MNI Techs: GBPUSD maintains a choppy tone. The pair recovered Wednesday bouncing sharply off the day low of 1.2863. Price however remains below Monday's high of 1.3083. A break of this level is needed to resume the recent uptrend that would open 1.3000 and 1.3163. The latter is the former trendline support drawn off the Mar 20 low. The trendline was breached on Sep 9. A break of 1.3163 is required to strengthen a bullish theme. Initial support is at 1.2863.