Positive Brexit Reports Keep Sterling Buoyed

Positive Brexit reports added to a risk on feel Monday which allowed cable to extend its recovery off Friday's low of $1.2688 to $1.2930 in early NY before it drifted off to $1.2829 ahead of the close. Brexit developments remain a key driver for sterling, a Times report in Asia suggesting European negotiators have indicated that they are prepared to start writing a joint legal text of a trade agreement with the UK, pushed cable up to $1.2882 before momentum faded. Rate eased off to $1.2836 before it crept back to $1.2868 into Europe. Hopes that the EU and UK are nudging closer together for a trade deal should provide underlying buoyancy for sterling and could provide some counter to expected month-end USD demand. A data light day for the UK with main focus on BOE Bailey at 1500BST. Support $1.2830, $1.2800, $1.2780. Resistance $1.2880/85, $1.2930/35, $1.2950/60.
MNI Techs: GBPUSD found strong support Monday. Yesterday's gains resulted in breach of resistance at 1.2867, Sep 22 high. The break higher has exposed the 1.2908-23 resistance zone, the 20-and 50-day EMAs. This zone was tested but has so far offered resistance. It represents an important resistance zone area and if cleared, would suggest scope for stronger gains towards 1.3007, Sep 16 high and a key hurdle for bulls. Key support lies at 1.2676.