Cable nears 1.3000 as pound keeps firmer on the session
The pound stays underpinned on Brexit hopes
With Brexit talks still expected to resume later in the week and rumours of the UK looking to tweak its internal market bill to make room for a compromise, the pound is getting a further lift to start the new week with cable now nearing 1.3000.
Buyers have broken earlier near-term resistance to establish a more bullish bias with the likes of GBP/JPY also seeing a more bullish development with price action there breaking above its key daily moving averages @ 136.38-54 to 136.89 currently.
However, this is where the challenge gets a bit more stern for the pound, with cable nearing the key 1.3000 handle – a psychological level – and also the daily trendline resistance from the 1 September high to 12 October high, seen at 1.3017.
Those will be some key levels to watch ahead of the close before getting towards the resistance region from last week @ 1.3064-83.
As much as there is hope for a Brexit deal to be struck, avoiding an immediate result of a no-deal outcome doesn’t really get us closer to a compromise just yet.
Hence, the relief for the pound may be short-lived if there are further setbacks to Brexit negotiations in the coming days/weeks once again.
As things stand, it is all headline risk still for the pound at this point in time but the latest developments are granting some reprieve for the quid to build on.
But unless those key technical levels above start to give way, gains may be more measured from hereon until we get further hints on how Brexit talks are playing out.
Source: Technical analysis