Business Support Extension Counters Expected 2nd Wave Lockdown Measures

Rate closed at its Friday low of $1.2915, having retreated away from its earlier high of $1.3000. Initial trade in a Tokyo holiday fuelled Asian session saw rate struggle to edge back above $1.2940 until it was given an added lift as market reacted positively to a report in the FT that suggests UK Chancellor Sunak to extend business support loans(ignoring expected fresh lock down measures this week in an attempt to slow down an emerging COVID second wave). Cable edged on to $1.2963 ahead of the Europe open, with early sellers emerging to take advantage of this late Asia session rally which eased rate back to the $1.2940 area. Some demand noted here but only enough to keep rate buoyed just above this level at writing. A break of this area to open a deeper pullback toward $1.2925/15 ahead of $1.2900 and Thursday's low of $1.2865. Resistance now seen between $1.2960/70, a break to expose $1.3000. A light UK calendar Monday but attention on UK-EU Brexit negotiations. BOE Bailey speaks Tuesday and Thursday. Wednesday brings flash UK PMI release.
MNI Techs: GBPUSD is holding onto recent gains. A bearish outlook however remains intact. This follows the breach on Sep 10 of trendline support drawn off the Mar 20 low. The move lower recently has also resulted in a break of 1.2867, the 50.0% retracement of the Jun 29 - Sep 1 rally opening 1.2722, the 61.8% level. On the upside, firm short-term resistance is at 1.3035, the Sep 10 high. A break of this level would signal a possible reversal.