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GBP Firm on Renewed Brexit Deal Hopes

GBP
MNI (London)
  • GBP/USD touched a pullback low of $1.3304 into Tuesday's 1600GMT fix, the rate having eased away from earlier Europe highs around $1.3450 as risk positions were pared.
  • Rate managed to recover to $1.3378 through the NY afternoon before closing at $1.3361.
  • Outlook for GBP looked a little brighter in Asia, market picking up on the freeing up of the Dover-Calais border restrictions allowing movement of trucks, the ITV political editor comment that there could be a Brexit trade deal as soon as today. This acted to edge GBP/USD back above $1.34, trading around $1.3410 into Europe.
  • This mildly positive outlook seen despite suggestions that further areas of the UK could be moved into Tier-4 restrictions, some seeing chance for another full lock down into 2021.
  • Light UK calendar Wednesday, focus on US data dump this afternoon including Weekly Claims, PCE/Pers.Income-Spending, Durable Goods, New Home Sales.
  • However, Brexit headlines remain the key driver of GBP direction.
  • Support $1.3350, stronger into $1.3300. Resistance $1.3450, $21.3470 and into $1.3500.
  • MNI Techs: The sharp sell-off from last week's 1.3624 high on Dec 17 highlights the importance of 1.3135, Dec 11 low as support. A break would undermine the recent uptrend and signal scope for a deeper pullback. Initial resistance is seen at 1.3503, Dec 21 high.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
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MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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