The British Pound (GBPUSD) rose sharply at 09:15 London time on The Times reporting that diplomatic sources near to the Brexit negotiations said that the Northern Irish assembly might be given a mechanism for leaving a potential backstop after a certain number of years. If this is true, then it will help PM Johnson to land a deal.
The Financial Times has also reported Boris Johnson will struggle with his no-deal Brexit view in the case of a general election, as the FT says that at least fifty Conservative PMs would revolt in the coming general election. If the Conservatives pivot for a softer Brexit, then that would help the GBP, on the other hand, it will strengthen the Brexit Party.
Yesterday the GBPUSD pair reached the October 1 low of 1.22 as I have been projecting since early October when I said that traders would probably short GBPUSD between 1.2386 and 1.2503 to target 1.22.
Today, the trend remains bearish below the October 3 high of 1.2422, and if the price was to revisit the 1.2300 to 1.2422 interval, then I think traders will see this as an opportunity to short-sell the British pound with a target of 1.21. However, if the price were to trade above the October 3 high, then traders might target the next resistance level, the September 24 high of 1.2504.
For more on the short-term technical levels that traders are watching, watch our daily morning Brief video below.