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Brexit Trade Deal Optimism Keeps Sterling Buoyed.

MNI (London)
  • Repeated Sun headlines suggesting UK Brexit negotiator Frost has informed PM Johnson that a trade deal could be agreed early next week reignited optimism and acted to lift GBP/USD off its early Europe dip low of $1.3193 to $1.3272 ahead of NY.
  • Upside was made easier by the general weaker USD tone, though EUR/GBP was able to ease back below its key technical 10-dma(current Gbp0.8964).
  • Upside momentum failed to carry into NY and GBP/USD drifted off to $1.3239 with late recovery efforts capped at $1.3260.
  • Opening Asia probed to $1.3266 as they hunted stops but as move failed to trigger any major momentum rate drifted back to $1.3244. Fresh demand emerged to edge rate to $1.3270 through the main part of the Asian session, holding around $1.3265 as markets switch focus to UK CPI release at 0700GMT(median 0.1%mm, 0.5% yy) .
  • BOE Haldane speaks at 1030GMT, BOE Bailey at 1630GMT.
  • Sterling retains an underlying buoyant tone into Europe, supported by Brexit trade deal hopes and post vaccine growth prospects.
  • Support $1.3240, $1.3200/1.3190, $1.3165/50. Resistance $1.3272, $1.3300, $1.3312(Nov11 high).
  • MNI Techs: GBPUSD maintains a bullish tone and is holding onto recent gains. Move higher since Nov 2 saw the pair breach a former key resistance at 1.3177, Oct 21 and Nov 6 high. This extends the recovery, that started Sep 23, and maintains the current bullish price sequence of higher highs and higher lows. Bull trigger is at 1.3312 where a break would open 1.3357, Sep 3 high. On the downside, firm short-term support lies at 1.3106, Nov 12 low.
MNI London Bureau | +44 203-586-2231 |
MNI London Bureau | +44 203-586-2231 |

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