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Brexit Negotiations, COVID Spread Reaction Weighs on GBP

EURGBP
MNI (London)
  • Recovery off last Thursday's low of Gbp0.8983 extended to Gbp0.9085 Friday as long GBP positions were adjusted into the weekend and Sunday's EU 'deadline' for a Brexit trade deal.
  • Move also saw the cross move, and close above its technically key 10-dma at GBP0.9069 (current Gbp0.9078) which negates recent bearish feel.
  • No deal announced at the midnight 'deadline' Sunday, though talks continue, saw GBP come under fresh pressure into Asia. This pressure increased as countries closed borders with the UK due to a more virulent strain of COVID 19 spreading in SE England.
  • EUR/GBP extended its recovery to Gbp0.9143 and brings the topside of the 1.0% 10-dma envelope at Gbp0.9169 into view, with resistance noted close behind at Gbp0.9172(76.4% 0.9230-0.8983), a break to expose the Dec11 high at Gbp0.9230.
  • Brexit trade negotiation headlines, along with COVID spread reactions to dictate GBP strength.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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