GBPUSD Above 1.3200 Despite Continued Brexit Stalemate
GBPUSD was trading above 1.3200 despite another week of fruitless Brexit talks. News on Friday saw Boris Johnson’s close Brexit aides Dominic Cummings and Lee Cain departing government.
The progress on Brexit has been slim after another week of talks in London and the U.K. negotiator was heading for Brussels for further talks on Sunday with familiar updates. David Frost told reporters that he, “will not be changing” his stance on the negotiations with his EU counterpart Michel Barnier. There was hope that a deal could be found over the weekend in order to present this to a virtual conference of the EU27
On Saturday the media reported that Dominic Cumming and Lee Cain would be leaving Boris Johnson’s government setup. This was follwed by a statement that the U.K. would not back down on securing a deal, however, the timing of deartures would suggest that the pair were unhappy with how negotaitions are going and maybe had an advance look at the text of an agreement. As we approach the December 31st deadline, we have to expect a big move in the pound. A deal would see a rally but the No Deal outcome is still possible.
The British economy will see the inflation figures released on Friday and the market is expecting a reading of 0.6% compared to 0.5% last month. The core inflation rate is expected to remain at 1.3%. The return to lockdowns and a rising pound could see deflationary pressures in later inflation releases.
GBPUSD Technical Outlook
The GBPUSD found support at 1.3150 and is now trading over 1.3200. The resistance is at 1.3300 and a stronger target is at 1.3488, which marked a high on September 1st. Bullish traders could go long with a stop under 1.3100. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.