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The GBP/USD pair lifted above 1.2900 on headlines that the UK and EU will persist with Brexit negotiations, adding to background optimism that a deal can be reached at the eleventh hour. Nonetheless, Terence Wu from OCBC Bank expects the cable to be capped by the 1.30 mark.

Key quotes

“Rhetoric from the negotiators on both sides were nowhere near optimistic, although intervention from EC President von der Leyen and PM Johnson kept the talks going. The fact that the talks would continue was enough to suppor the GBP. Nevertheless, given the lack of material progress, we still see the 1.2950-1.3000 range as a cap for now. Prefer to sell on rallies towards those levels”

“Support level around the 1.2850 area should limit dips, with 1.3000 capping at the topside.”