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Nov 05 - 11:55 AM

GBP/USD - COMMENT-Sterling Bulls Test 1.3100 After BoE Easing Avoids Negative Rates

By Paul Spirgel  —  Nov 05 - 10:15 AM

GBP/USD held onto post-BoE gains on Thursday, with bulls pleased that policymakers managed to ease through additional QE without intensifying negative-rates speculation nL8N2HR22R, but the pound encountered resistance above 1.3100 as focus switched back to Brexit.

Cable's rise lagged other major dollar pairs as Brexit and COVID health and economic uncertainties linger, both of which will keep concerns about negative rates simmering.

GBP/USD resistance comes at the early U.S. high of 1.3108, followed by Wednesday's peak of 1.3140 and then the October 21 trend high at 1.3177.

Should Brexit talks overcome differences over the EU's level-playing-field, fisheries and dispute resolution, GBP/USD could rally back near 1.3500, by its August high of 1.3481 and December's UK election peak near 1.3516.

A Brexit talks failure would increase market musings about BoE negative rates 0#FXX:, and could force a test of 100-DMA support currently at 1.2894, which has risen with the pound since mid-September lows, putting the 200-DMA at 1.2707 in sharper focus.
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Source:
Refinitiv IFR Research/Market Commentary

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