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Sterling Buoyant But Recent Shine Begins to Tarnish.

GBP
MNI (London)
  • GBP/USD recovery off Monday's pullback low of $1.3264(off earlier high of $1.3398) stalled at $1.3380 in Tuesday Europe morning business before it eased off to $1.3293 in early NY.
  • Positive risk allowed rate to edge back to $1.3365 through the balance of the NY session and into the close.
  • Despite the underlying buoyant tone, aided by a positive hope that a Brexit trade deal can be agreed, sterling has lost a bit of its recent shine with EUR/GBP edging back above Gbp0.89, having been rejected from the Gbp0.8870/60 area again, but remains below key technical 10-dma(current Gbp0.8941).
  • GBP/USD consolidated around $1.3260 through Asia but was seen coming under pressure into Europe which has pressed rate down to $1.3238.
  • Support seen into $1.3330, $1.3300, $1.3293, $1.3264. Resistance $1.3367, $1.3380, stronger into $1.3400 and $1.3420/25.
  • A data light calendar for the UK Wednesday. US has a pre holiday data dump including Weekly Claims, Durable Goods, Pers.Inc., PCE, UofM and New Home Sales.
  • UK focus on Chancellor Sunak's Spending Review.
  • Brexit trade negotiations remain the key directional driver.
  • Month-end value today could see some US corp USD demand emerge. Month-end models suggest USD sales for Monday's fixes.
  • MNI Techs: A bullish tone remains intact and a break of Monday's high at 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 seen at 1.3196. A break required to dent the bullish mood and risk a deeper corrective sell-off.
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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