- The EU’s chief Brexit negotiator Barnier says main elements of Brexit treat text are ready.
- British pound gathers strength on this news.
- US Dollar Index continues to float above 97.
After slumping to the lowest level of November at 1.2825 earlier today, the GBP/USD pair recovered strongly in the last hour and was last seen trading at 1.2915, still 50 pips below last week’s closing level.
Reports of more British politicians voicing their objection to Prime Minister May’s Brexit agreement and threatening to quit over the weekend forced the pair to start the week with a bearish gap. A former UK cabinet minister, Justine Greening, told reporters on Monday that the Brexit deal would not pass in the Parliament and suggested that the UK should have a referendum with three choices i.e. current deal, leave on WTO rules, or stay in the EU.
However, according to a recently published article in The Financial Times, the EU’s chief Brexit negotiator Michel Barnier told ministers from the EU’s remaining 27 member states that the main elements of an exit treaty text were ready to present to the UK cabinet on Tuesday, and helped the British pound retrace a large portion of its daily drop.
Barnier says Brexit treaty text almost ready – FT.
On the other hand, the US Dollar Index, which rallied to its highest level of the year of the year at 97.58 earlier today, stays in the positive territory and makes it difficult for the pair to extend its rebound. In the absence of macroeconomic data releases from the U.S., Brexit headlines are likely to drive the pair’s price action in the remainder of the day.
Technical levels to consider
The pair could face the initial resistance at 1.3000 (psychological level/100-DMA) ahead of 1.3040 (50-DMA) and 1.3115 (Nov. 6 high). On the downside, supports are located at 1.2900 (psychological level), 1.2825 (daily low) and 1.2775 (Oct. 26 low).
Share
