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Some Brexit Movement but COVID Spread a Concern.

GBP
MNI (London)
  • Failure to agree the Brexit trade deal by the EU 'deadline' of Sunday night and the closing of borders with the UK, due to the more virulent strain of COVID-19 in SE England, saw GBP under pressure through Asia and early Europe trade Monday.
  • GBP/USD extended its corrective pullback away from Thursday's high of $1.3624 to $1.3188 before buyers emerged which prompted a recovery through the NY session to $1.3498 as market reacted to reports of some movement on the fisheries stumbling block by the UK side(talk of UK MP's being called back next week for a vote), as well as PM Johnson stating that talks with France to unlock the border were progressing.
  • Rate drifted off to $1.3431 before closing the day at $1.3468.
  • Despite the negotiation move reports suggest both sides remain apart on a deal, but talks continue.
  • GBP/USD eased in Asia to a low of $1.3380 breaking back above $1.3400 into Europe.
  • Focus remains on Brexit developments as well as international reactions to COVID spread in the UK for GBP direction, though Brexit showing sparks of optimism.
  • UK final GDP at 0700GMT, along with UK Borrowing data.
  • Support $1.3380, $1.3350/40, $1.3300. Resistance $1.3498/03, $1.3521, $1.3550.
  • MNI Techs: Monday's sharp sell-off from last week's 1.3264 high on Dec 17 brings into focus key support at 1.3135, Dec 11 low. A break of this level would undermine the recent uptrend and signal scope for a deeper pullback. Cable is likely to remain volatile, initial resistance is seen at 1.3503, Dec 21 high.
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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