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Nov 18 - 11:55 AM

GBP/USD - COMMENT-Tedious Brexit Vigil No Big Obstacle For Sterling

By Paul Spirgel  —  Nov 18 - 10:15 AM

GBP/USD struck a 1-week high of 1.3297 [nL1N2I40T0], rising with its upper 30-day Bolli after UK CPI beat expectations nL8N2I41DY, helped by prevailing dollar weakness as markets await Brexit details

Cable subsequently slipped back to 1.3275 with tradersfixated on dollar weakness related to resurgent COVID cases, which have pressured the U.S. growth view lower nW1N28N025 -- along with Congress' inability to approve COVID relief aid to support the U.S. economy before vaccine roll-out and distribution.

Sterling bulls are focusing less onPrime Minister Boris Johnson's no-deal posturingnS8N2GY09X, latching on instead to more upbeat expectations.

BoE Deputy Governor Dave Ramsden recently interpreted markets as pricing in a 20% chance of a no-deal event come year-end nL9N2GY026.

Positive Brexit news would likely lift GBP/USD above 1.3322, its Nov. 11 high, putting Sept. 1's 1.3481, 2020 high, in focus.
In the event EU-UK negotiations break down, GBP/USD is likely to quickly correct to the downside, melting below 10-day moving average support at 1.3201, the daily cloud top at 1.3079 and then a series of DMAs from the 30-DMA at 1.3063 to the 100-DMA at 1.2967.

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Source:
Refinitiv IFR Research/Market Commentary

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