Pound to $1.3170?
Fiona Cincotta December 30, 2019 10:59 AM
The pound is on the rise for the sixth straight session, extending gains by 0.3% at the start of the week versus both the euro and the dollar
The pound is on the rise for the sixth straight session, extending gains by 0.3% at the start of the week versus both the euro and the dollar, as thin trading volume enhances action in the fx markets.
Pound traders are shrugging off the no deal Brexit concerns that caused sterling to pare post-election gains.
The UK is set to leave the UK on 31st January, entering a transition period whereby it will remain in the single market and customs union until the end of 2020. Boris Johnson has pledged to not extend the transition period, meaning that there is a tight timetable for complex UK/EUR trade negotiations. The EU Commission President, Ursula von der Leyen has expressed doubts that a trade deal can be reached within the time set out.
In the case that no trade agreement is reached the UK will leave the EU under WTO trade rules, a significant step down from the current arrangement and an arrangement that investors fear will negatively impact the UK economy.
Despite the recent rally in the pound, concerns over Brexit are likely to continue weighing on sterling heading into 2020.
Weakness in the dollar is also helping boost cable. Profit taking after a strong year, in addition to improved risk sentiment amid easing US – China trade tensions is boosting flows out of the safe haven greenback. US Chicago PMI’s up next.
Levels to watch:
GBP/USD is trading with bullish momentum, trading above its 20 and 50 sma on 30-minute chart. Resistance can be seen at $1.3145 and $1.3170. A break below $1.3080 is needed to negate the bullish bias. On the downside support can be seen as $1.3065 and $1.3045.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.