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Risk Appetite and Brexit Optimism Keeps GBP Buoyed

GBP
MNI (London)
  • Headline that EU Barnier was suspending Brexit negotiation talks Thursday saw GBP/USD drop to an extended low of $1.3196.
  • However, suspension explained by an EU team member testing positive for COVID and talks to continue allowed sterling to recover.
  • Eventual break above $1.3240 allowed rate to edge onto $1.3279 in a fresh risk-on driven move. Rate closed at $1.3261.
  • Early Asia pressed rate to $1.3247 before risk appetite allowed rate to push up to $1.3284, holding firm as market awaits release of UK Retail Sales at 0700GMT, median seen at 0.0%mm, 5.9%yy ex auto; -0.3%mm, 4.1%yy incl auto. UK Borrowing data to be released at same time.
  • Brexit trade negotiations continue, headlines to be watched. BBC suggested talks have been going well but market now seen needing something definite to boost upside hopes.
  • GBP/USD support seen at $1.3250/40, $1.3200/1.3190. Resistance $1.3284($1.3285 76.4% $1.3312-1.3196), $1.3300, stronger at $1.3312(Nov11-18 highs).
  • MNI Techs: GBPUSD maintains a bullish tone and has this week tested resistance at 1.3312. The move higher from the Nov low 2 saw the pair breach a former key resistance at 1.3177, Oct 21 and Nov 6 high. This extends the recovery that started Sep 23 and maintains the current bullish price sequence of higher highs and higher lows. A clear breach of 1.3312 would open 1.3357, Sep 3 high. On the downside, firm S/T support lies at 1.3106, Nov 12 low.
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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