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Brexit Optimism Prevails But Market Notes Further Stumbling Blocks

GBP
MNI (London)
  • Increased Brexit trade deal optimism Thursday provided sterling with the lift to take GBP/USD through earlier YTD high of $1.3482 and on to $1.3500 before meeting stiff resistance.
  • Move also allowed EUR/GBP to ease back within its 1.0% 10-dma envelope which helped to relieve pressure on the pound from this direction.
  • Sterling pared some of its gains post 1600GMT fix, risk taking a slight knock on reports that Pfizer to cuts its year end vaccine rollout target due to supply chain concerns.
  • GBP/USD eased to $1.3433 before it settled around $1.3350 into the close.
  • Sterling retained its underlying buoyant tone through Asia despite press reports suggesting that France fishing rights could scupper progress. PM Johnson to speak to French President Macron at the weekend, focus if Johnson contacts von der Leyen.
  • Despite reported setbacks the underlying tone remains that a deal can be reached which is firming GBP/USD into Europe, currently around $1.3460. Resistance $1.3480, strengthening through to $1.3500($1.3514 Dec13-2019 high). Support $1.3440/30, $1.3400.
  • UK Construction PMI at 0930GMT. BOE MPC Tenreyro speaks at 0930GMT. US NFP at 1330GMT main data focus but Brexit headlines to provide key sterling directional impetus.
  • MNI Techs: GBPUSD traded higher Thursday, touching a high of 1.3500 for the first time in close to a year. Importantly too, the rally probed resistance at 1.3482, Sep 1 high. A clear breach of this level would confirm a resumption of the broader uptrend that started in March. This week's climb has exposed 1.3514, Dec 13 high and further upside would open 1.3547, a Fibonacci projection level. Firm near-term support is at 1.3289/88.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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