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Positive Brexit Headlines Keep Sterling Buoyed But Needs Confirmation

MNI (London)
  • Monday's opening risk appetite allowed GBP/USD to push up to $1.3243 before momentum faded and sterling lost its general shine.
  • Rate eased off to $1.3166, recovered to $1.3217 ahead of the NY open before paring those gains in early US trade. Moderna vaccine announcement provided risk with a fresh boost but was only able to edge cable back to $1.3204 into the close.
  • Asian traders picked up on a Sun headline suggesting that UK Brexit trade negotiator Frost has informed PM Johnson that a deal could be agreed by early next week(market ignored caveats that it could all fall apart over fishing and red tape). GBP/USD jumped to $1.3233 before it settled between $1.3208/28, trading around $1.3212 into Europe.
  • Support $1. 3200/1.3190, stronger $1.3165/50. Resistance $1.3233/43(intraday high/Nov16 high), $1.3263(76.4% $1.3312-1.3106)., $1.3310/12.
  • Brexit trade negotiations remain in focus but market now looking for something more concrete. COVID spread/vaccine access also of interest.
  • BOE Governor Bailey speaks at 1400GMT. Dep Gov. Ramsden speaks at 1700GMT.
  • MNI Techs: GBPUSD maintains a bullish tone despite the corrective pullback on Nov 11 and 12. Recent gains have seen the pair breach a former key resistance at 1.3177, Oct 21 and Nov 6 high. This maintains the recovery that started on Sep 23 and the current bullish price sequence of higher highs and higher lows. The 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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