GBP/USD has moved up to test the top of the ascending channel and is shy of the 100-D SMA by around 30 pips, (ATR 14 at 100 pips signals end of move), trading at the highest levels since late July – ( Friday’s high was at 1.3143/45). Cautious optimism regarding the chances of a Q4 Brexit deal is underpinning the upside along with broad dollar weakness. GBP/USD is currently oscillating at 1.3148, up from 1.3068 and down from the high of 1.3157. GBP/USD, underpinned by Q4 Brexit hopes, has staged a strong performance since the 14th August from 1.2661. GBP shorts have dropped back from their late August levels on flickers of optimism about the likelihood of an EU/UK Brexit deal, although they remain elevated. However, PM May continues to be undermined by members of her own party reflecting her weak position. However, Friday’s warning from BoE Governor Carney that a no-deal Brexit threatens higher inflation and higher policy rates is a double-edged sword for sterling traders. The UK weekend press on Brexit carried the warning from ex-Foreign Secretary Boris Johnson that if the Brexitnegotiations continue on their current path that they will end “in a spectacular political car crash” – analysts at Rabobank pointed out: If Brexitnegotiations continue on their current path that they will end “in a spectacular political car crash” “The crux of his accusation lies with the EU’s backstop plan for the Northern Irish border in which “Northern Ireland would have to remain effectively part of the EU”, in the absence of a better alternative. Despite Johnson’s criticisms, which many ascribe to a warm up to a leadership challenge, PM May did see some support over the weekend from Brexiteers Gove and Fox. The latter described May as doing a greater job in difficult circumstances while Gove suggested that May’s plan is the right one for now to ensure that Brexit happens.” The analysts at Rabobank also warned that although a significant relief rally for the pound is likely if a free trade deal is put in place in the next few months, the extent of any gain could be tempered if the terms of a deal turn out to be a fudge with much uncertainty kicked into the post Brexit era. “On Wednesday EU leaders are due to meet in Austria in an attempt to make some progress on the issue of the N. Ireland border. This is being billed as the first step of a three stage summit to push through a UK-EU deal, the results of which could be presented in mid-November (though reports of special summits in December and even January are also doing the rounds). Although the obstacles still appear to be significant – specifically with respect to the Northern Ireland border, there is some positivity in the EU. According to the former EU commissioner and director of the WTO, Pascal Lamy, “what has to be negotiated has been negotiated. This is a negotiation within London between Remainers and Brexiteers” – the anlysts at Rabobank explained. GBP/USD levels Daily RSI has room to go to the upside still while the pound moves in on the 100-D SMA. ATR 14 has increased to 100 pips per day average, and we are not far off from that in today’s price action in the pound. The price is carving its way through the top of the bullish channel’s resistance as the bulls continue to back the correction of the 16th April sell-off from the 1.14370s and have a target of the 1.32 handle ad July ‘double tops’ at 1.3201/12. 1.13209 comes as the prior 4hr support 14th June. Then, 1.3290 as a wider target, guards 1.3355 (both are 4-hr prior supports). 1.3363 is the 9th July high. On the downside, the market ran out of sellers ahead of the 1.3042 target, (29th August 4hr resistance) – and a break there opens 1.2973. A break below the 21-D SMA, (1.2943), opens the 1.28 handle and then the 1.2677 level on the wide where bears can aim for 1.2589 as the June 2017 low. 1.1985 is the H&S objective below there. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street Expert score 5 Etoro - Best For Beginner & Experts0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 5 Read Review Open My Free Account Your capital is at risk. FXStreet News share Read Next Brexit remains the focus for markets still – Scotiabank FX Street 3 years GBP/USD has moved up to test the top of the ascending channel and is shy of the 100-D SMA by around 30 pips, (ATR 14 at 100 pips signals end of move), trading at the highest levels since late July - ( Friday's high was at 1.3143/45). Cautious optimism regarding the chances of a Q4 Brexit deal is underpinning the upside along with broad dollar weakness. GBP/USD is currently oscillating at 1.3148, up from 1.3068 and down from the high of 1.3157. GBP/USD, underpinned by Q4 Brexit hopes, has staged a strong performance since the 14th August from 1.2661. 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