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Dec 15 - 01:55 PM

GBP/USD - COMMENT-Sterling Brushes Off Last Week's Dive As Brexit Optimism Reigns

By Randolph Donney  —  Dec 15 - 11:40 AM

GBP/USD rebounded on Tuesday on the enduring expectation that the EU and UK will ultimately agree a Brexit deal to save both from another economic shock on top of pandemic lockdowns nS8N2HC0BN.

That view persists as deal buzz among UK lawmakers nS8N2HC0BN comes after British Prime Minister Boris Johnson telling ministers a no-deal Brexit was most likely nS8N2HX02X and Ireland's Foreign Minister Simon Coveny said some slow progress was being mode on a key issue nS8N2HS07T.

Monday and Tuesday's lows attracted buyers near the rising 30-day moving average line, last at 1.3289.
That's after last week's Brexit-angst-induced dive was reversed by the rising 55-day moving average line.

This month's retreat from the 1.3540 trend high to its 1.3135 low looks like an ABC correction, one needed to reset overbought oscillators, which are now rising from neutral levels.

This bullish view would be confirmed if sterling closed above the 1.3476 B-wave high from Dec.
9 and September's 1.3481 peak.

This and last year's highs have all been close to 1.3500.
If a reasonably comprehensive Brexit deal is reached, 38.2% and 50% Fibos of the 2014-2020 drop at 1.3621/4303 would be in play.

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Source:
Refinitiv IFR Research/Market Commentary

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