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Nov 16 - 08:55 PM

GBP/USD - COMMENT-Sterling Poised For A Big Move As Brexit Enters Crunch Phase

By Andrew M Spencer  —  Nov 16 - 07:30 PM

Sterling has been consolidating around 1.3200 for over a week, but as the crunch approaches for Brexit negotiations, significant volatility looms.

The market believes that a Brexit compromise will be found as the economic consequences of not reaching an agreement, while COVID-19 remains rampant, will force a deal.

The UK repeated on Sunday that they will only back a deal 'that is compatible with our sovereignty', while the EU show no signs of softening their base demand of a 'level playing field' for government policy to ensure fair competition nL8N2I21TY

Both sides reiterate that they are working towards a deal, as it would be political suicide to walk away from the talks and be the cause of the breakdown.
There is progress on many of the details, but core differences remain. The Sun claims that UK Brexit negotiator David Frost has told Prime Minister Boris Johnson to expect a deal next week nFWN2I21IU.

GBP/USD charts are positive, with 5, 10 and 21 daily and weekly moving averages climbing, but momentum signals are of little use into major event risk.
Key support levels on no-deal are the 1.2854 November low, then the 1.2676 September base.
The knee-jerk reaction to even a partial deal would be a test of the 1.3481 September high.

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Source:
Refinitiv IFR Research/Market Commentary

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