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GBP Retains Firm Feel on Brexit Optimism But Month-End Value Looms

GBP
MNI (London)
  • The break of $1.3312 in Asian trade Monday provided for an extended rally into Europe which took rate to $1.3398 into early NY.
  • Move higher was driven by optimistic comment on the Brexit trade deal (nothing definite announced) along with positive results for the AstraZeneca vaccine.
  • The USD began to attract general demand interest, possibly linked to the upcoming US holiday and Monday's month-end value looming for US corporates, with release of stronger than forecast US PMI data providing the trigger for a stronger correction, aided by Democrats sounding out Janet Yellen for Tsy Sec. post.
  • The rush into USD's saw GBP/USD pressed to a low of $1.3264 into the 1600GMT fix before fresh demand emerged to edge it back to $1.332, closing at $1.3324.
  • Recovery continued at a slow pace through Asia, rate able to edge to $1.3344 into Europe. Optimism remains concerning a Brexit trade deal before the end of the month. European parliament said to be preparing a special voting session between Christmas/New Year.
  • UK CBI Reported Sales at 1100GMT provides data interest. BOE Haskel(dove) speaks at 1100GMT.
  • Support $1.3320/12, $1.3300, $1.3280, $1.3264. Resistance $1.3347(61.8% $1.3398-1.3264), $1.3366(76.4%), stronger into $1.3400. Commerz highlight a 13-year downtrend resistance at $1.3422.
  • MNI Techs: Early strength in GBPUSD yesterday reversed into the close as a broad-based USD bid dragged most major pairs lower. Despite the pullback, a bullish tone remains intact and a break of yesterday's high of 1.3398 would confirm a resumption of recent gains and pave the way for a climb towards key resistance at 1.3482, Sep 1 high. On the downside, initial firm support is seen at 1.3196.
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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