GBPUSD Sinks As France Mulls Moving Euro Clearing from London
The GBPUSD is down sharply in New York trading on Reuters reports that France intends to move the clearing of Euro contracts away from London to the Eurozone. The Reuters report, which is quoting industry professionals close to the situation, comes on the back of other stories which indicate that the EU may shelve concessions made in the MiFID 2 regulations to the UK, as post-Brexit trade talks near.
The Pound has had its worst week in nearly two months. It looks set to end the week approximately 300 pips lower after the EU Chief Negotiator and UK PM Boris Johnson presented varying standpoints on how trade relations between the two sides would go on after the December 2020 Brexit transition period deadline.
The GBPUSD has broken below the symmetrical triangle which has held price action in sideways consolidation on the daily chart and is now challenging the support level seen at 1.29042. This support is formed by the lows of early and late December 2019 and represents the price to beat for bears.
A breakdown of this support area opens the door for the price to target the November lows of 1.2823, while 1.2785 lurks below. Price would need to strike the 1.25767 support level (previous high of September 2019 in role reversal) to complete the measured move from the triangle break.
Failure to break the 1.29042 support level could prompt a pullback which targets the broken triangle border at the first instance. 1.29932 would be the price to watch in this circumstance.